Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

5. INCOME TAXES

The Company files a both Federal and California income tax returns. Income tax expense for the years ended December 31, 2013 and 2012 consisted of the following:

	2013		2012
State franchise tax	$	800	$	800
Federal taxes		-		-
Total	$	800	$	800

Income tax expense for the years ended December 31, 2013 and 2012 differed from the amounts computed by applying the U.S. federal income tax rate of 34 percent to loss before income taxes primarily due to the generation of additional net operating loss carry forwards for which no net tax benefit has been provided (full vacation allowance).

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2013 is composed primarily of the net loss carry forwards. The net change in the total valuation allowance for the year ended December 31, 2013 was insignificant. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable losses, management believes it is more likely than not the Company will not realize the benefits of these deductible differences and has established valuation allowance to fully reserve the deferred tax assets at December 31, 2013 and 2012. Additionally, the ultimate realizability of net operating losses may be limited by change of control provisions under Section 382 of the Internal Revenue Code.

At December 31, 2013, the Company had net operating loss carry forwards for Federal income tax purposes of approximately $3,539,725 which are available to offset future Federal taxable income, if any, expiring through 2032.

The accounting principles generally accepted in the United States of America provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company files income tax returns in the U.S. and various state jurisdictions. The Company is subject to examinations by U.S. Federal and State tax authorities from 2010 to the present, generally for three years after they are filed.