v2.4.0.6
Note 12. Provision For Income Taxes
 12 Months Ended
Mar. 31, 2012
Income Tax Disclosure [Text Block]
12.           PROVISION FOR INCOME TAXES

The Company follows the provisions of SFAS No. 109, ASC 740 “Accounting For Income Taxes,” which provides for recognition of deferred tax assets and liabilities for deductible temporary timing differences, operating loss carryforwards, statutory depletion carryforwards and tax credit carryforwards net of a valuation allowance for any asset for which it is more likely than not will not be realized in the Company’s tax return. An analysis of the Company’s deferred taxes follows:

   
2012
   
2011
 
Deferred tax liabilities
           
Fixed assets
  $ 2,544,488     $ 1,534,761  
Discount on convertible debt loan
    1,702,724       -  
      4,247,212       1,534,761  
Deferred tax assets
               
Stock-based compensation
    1,225,596       1,078,758  
Accrued income and expenses
    55,415       90,398  
Charitable contributions
    1,727       1,434  
Intangible assets
    -       15,578  
Derivative liability
    1,372,994       545,185  
Net operating loss carryforwards
    2,903,248       3,083,937  
      5,558,980       4,815,290  
Valuation allowance
    (1,311,768 )     (3,280,529 )
Deferred income taxes, net
  $ —     $ —  

At March 31, 2012, we had approximately $7.4 million of operating loss carryforwards. The net operating loss carryfowards would begin to expire in 2028. Some of our net operating losses may be limited by section 382 of the Internal Revenue Code due to the change in control that occurred in March of 2008. Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, (SFAS 109) specifies that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion of the deferred tax asset will not be realized. Accounting rules require that more restrictive criteria be used to consider the book value of deferred assets in instances in which a company has not demonstrated an ability to generate taxable income. Realization of the deferred tax asset is dependent on generating sufficient taxable income prior to expiration of any net operating loss carryforwards. Because there is some uncertainty as to the Company’s ability to generate future taxable income, net operating loss carryforwards have been fully reserved.

Management assessed its various income tax positions and this assessment resulted in no adjustment to the tax asset or liability.  The preparation of our various tax returns requires the use of estimates for federal and state income tax purposes.  These estimates may be subjected to review by the respective taxing authorities.  A revision, if any, to an estimate may result in an assessment of additional taxes, penalties and interest.  At this time, a range in which our estimates may change is not quantifiable and a change, if any, is not expected to be material.  We will account for interest and penalties relating to uncertain tax provisions in the current period income statement, as necessary.  We have not recorded any adjustment to our financial statements as a result of this interpretation.  We have tax years 2004 through 2011 remaining subject to examination by various federal and state tax jurisdictions, as applicable.