INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31:

	2013			2012
Currently payable:
Federal	$	-		$	-
State		-			-
Total currently payable		-			-
Deferred:
Federal		(2,217,527	)		(1,351,316	)
State		(528,872	)		(322,185	)
Total deferred		(2,746,399	)		(1,673,501	)
Less: (decrease) increase in allowance		(8,202,476	)		1,692,449
Net deferred		(10,948,875	)		18,948
Total income tax provision (benefit)	$	(10,948,875	)	$	18,948

Schedule of Deferred Tax Assets and Liabilities

Individual components of deferred taxes are as follows:

	2013			2012
Deferred tax assets:
Net operating loss carry forwards	$	15,960,340		$	14,079,414
Equity issued for services		721,934			603,785
Goodwill and other intangibles		218,896			0
Other		338,087			422,998
Gross deferred tax assets		17,239,257			15,106,197

Deferred tax liabilities:
Goodwill and other intangibles	$	9,827,201		$	234,822
Depreciation and amortization		286,520			922,706
Investment in pass-through entity		2,414,716			-
Gross deferred tax liabilities	$	12,528,437		$	1,157,528

Less valuation allowance		(5,851,944	)		(14,076,344	)

Net deferred tax liabilities	$	(1,141,124	)	$	(127,675	)

Schedule of Effective Income Tax Rate Reconciliation

The differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated statements of operations are as follows:

	2013			2012

Statutory United States federal rate		34.0	%		34.0	%
State income taxes net of federal benefit		4.2			5.0
Permanent differences		(4.5	)		(0.8	)
Other		(0.8	)		1.0
Change in valuation reserves		98.1			(39.6	)

Effective tax rate		131.0	%		(0.4	)%