Income Taxes

The provision for income taxes consists of the following:



	2015			2014
Current tax provision	$	4,081		$	236,403
Deferred tax benefit	(304,224		)	(236,403		)
Total tax benefit	$	(300,143	)	$	—

A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows:



	2015		2014
Federal statutory rate	34	%	34	%
State income tax rate, net of federal benefit	—	%	8	%
Permanent differences	1	%	—	%
Temporary differences	4	%	—	%
New Jersey tax settlement and other	11	%	—	%
Net operating loss adjustment	—	%	(30	%)
Change in valuation allowance	(65	%)	(12	%)
	(15	%)	—	%

Deferred Income Taxes

Deferred income taxes are the result of temporary differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items and net operating loss carry-forwards.

We assess temporary differences resulting from different treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded in the consolidated balance sheets. We evaluate the realizability of our deferred tax assets on a regular basis, an exercise that requires significant judgment. In the course of this evaluation we considered our recent history of tax losses, the economic conditions in which we operate, recent organizational changes and our forecasts and projections. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a valuation allowance for the net deferred tax assets that may not be realized as of December 31, 2015 and 2014.

The following is a schedule of the deferred tax assets and liabilities as of December 31, 2015 and 2014:



	2015			2014
Deferred tax assets:
Net operating loss carry forward	$	34,164,267		$	34,176,741
Intangible assets	3,909,300			4,435,700
Deferred rent	2,200			46,300
Depreciation	—			164,100
Allowance for doubtful accounts	6,900			48,800
Accrued expense	552,500			746,700
Stock based expenses	1,201,800			1,493,100
Other	15,000			24,200
Subtotal	39,851,967			41,135,641
Less valuation allowance	(39,838,347		)	(41,135,641		)
Total	13,620			—
Deferred tax liabilities:
Intangibles	3,435,700			3,523,000
Other	363,900			29,500
Total	3,799,600			3,552,500
Total deferred tax assets (liabilities)	$	(3,785,980	)	$	(3,552,500	)

The net operating losses amounted to approximately $77,854,000 and expire beginning 2021 through 2033. Pursuant to Internal Revenue Service Code Section 382, the use of certain of the Company’s net operating loss carry forwards are limited due to a cumulative change in ownership.

We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2012 through 2014. Our state income tax returns are open to audit under the statute of limitations for the same periods.

We recognize interest and penalties related to income taxes in income tax expense. We have incurred no penalties and interest for the years ended December 31, 2015 and 2014.