5. INCOME TAXES

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 5 – INCOME TAXES

The components of income tax benefit (expense) are as follows for the years ended December 31:

	2017		2016
Current	$	38,728	$	(1,295	)
Deferred		–		–
Total	$	38,728	$	(1,295	)

Included in the current tax benefit for the year ended December 31, 2017 is a $40,200 benefit resulting from the write off of the Company’s accrual for uncertain tax provisions due to the expiration of the statute of limitations.

Deferred tax assets are calculated using a combined statutory tax rate of 39%. The Company’s deferred income tax asset and the related valuation allowance are as follows at December 31:

	2017			2016
Deferred tax assets - current:
Accrued compensation	$	210,259		$	184,324
Accrued interest – related party		1,190			480
		211,449			184,804
Deferred tax assets - long-term:
Net operating loss carryforwards		5,728,709			5,774,160
Amortization		28,676			20,914
Total deferred income tax assets		5,968,834			5,979,878
Valuation allowance		(5,968,834	)		(5,979,878	)
Total	$	–		$	–

A reconciliation of benefit (provision) for income taxes provided at the federal statutory rate to actual provision for income taxes is as follows for the years ended December 31:

	2017			2016
Benefit (provision) for income taxes computed at federal statutory rate	$	(87,355	)	$	(104,386	)
State income taxes, net of federal benefit		(94	)		(39	)
Impairment expense		113,201			–
Other		19,604			64,128
Valuation allowance		(6,628	)		39,002
Benefit (provision) for income taxes	$	38,728		$	(1,295	)
Effective tax rate		17.29%			(0.48%	)

As of December 31, 2017, the Company had net operating loss carry-forwards for federal income tax reporting purposes of approximately $14.7 million that may be offset against future taxable income through 2037. The Company has state net operating loss carry-forwards of approximately $4.9 million that may be offset against future taxable income through 2030. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance that the carry-forwards will expire unused. Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

The Company files income tax returns in the U.S. federal and Utah jurisdictions. Tax years 2012 to current remain open to examination by U.S. federal and state tax authorities.