NOTE 13 - INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 13 – INCOME TAXES

The Company and its subsidiaries filed consolidated Federal and state income tax returns. Tax years 2012, 2013, 2014 and 2015 are subject to examination by the Internal Revenue service and certain state taxing authorities. The Company does not believe there would be any material adjustments upon such examination.

As of December 31, 2015, management has determined that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements.

As of December 31, 2015 and 2014 the Company had net operating loss carryforwards of approximately $5,717,000 and $5,291,000 respectively, to reduce future Federal income tax liabilities through 2037, which under regulations of the Internal Revenue Service related to ownership changes are limited under IRC Section 382 to approximately $669,000 per year.  

As of December 31, 2015 and 2014 realization of the Company’s deferred tax assets of $5,171,000 and $3,483,000 respectively, were not considered more likely than not and, accordingly, a valuation allowance of $5,171,000 and $3,483,000 respectively, has been provided.

The net change in the valuation allowance during the year ended December 31, 2015 increased by $1,688,000 and in 2014 decreased by $6,406,000. 

	2015			2014
Amortization of intangibles	$	2,672,000		$	1,860,000
Allowance for doubtful accounts		220,000			324,000
Reserve for vacation payroll and legal settlement		79,000			79,000
Net operating loss		2,200,000			1,220,000
		5,171,000			3,483,000
Valuation allowance		(5,171,000	)		(3,483,000	)
Net deferred tax asset	$	-		$	-

For the years ended December 31, 2015 and 2014, the actual tax expense differs from the effective tax expense (benefit) based on the U. S. Federal Rate of 34%, as follows:

	2015			2014
Expected Federal tax rate		(34.0	%)		(34.0	%)
Expected state tax rate, net of Federal effect		(6.0	%)		(6.0	%)
Change in valuation allowance		40.0	%		40.0	%
		-	%		-	%