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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

INCOME TAXES

NOTE 6. INCOME TAXES

 

The Company accounts for income taxes under ASC Topic 740: Income Taxes, which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

 

On December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act (the “2017 Tax Act”). Management reviewed and incorporated the new tax bill implications in the 2017 financial statements. The main change is the re-measurement of deferred taxes at the new corporate tax rate of 21%, which reduced the Company’s net deferred tax assets, before valuation allowance, by $2.2 million. Due to full valuation allowance, the change in deferred taxes was fully offset by the change in valuation allowance.

 

The components of income tax provision (benefit) for the years ended December 31,2022 and 2021 are as follow:

 

Schedule Of Components Of Income Tax Expense Benefit

 

 

2022

 

 

 

2021

 

Current taxes:

 

 

 

 

 

 

 

Federal

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

Total current taxes

 

—

 

 

 

—

 

Deferred tax provision (benefit)

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

$

—

 

 

$

—

 

 

 

 

 

A reconciliation of the income tax (provision) benefit at the statutory rate of 21% for the years ended December 31, 2022 and 2021 to the Company’s effective tax rate is as follows:

 

Schedule Of Effective Income Tax Rate Reconciliation

 

 

2022

 

 

2021

 

U.S. Statutory tax rate

 

21.0

%

 

21.0

%

Change in valuation reserve on deferred tax assets

 

(21

)%

 

(21

)%

 

 

 

 

 

 

 

Income tax (provision) benefit

 

—

%

 

—

%

 

 

Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2022 and 2021 are as follows:

 

Schedule Of Deferred Tax Assets And Liabilities

 

 

2022

 

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

 

Net operating loss carryforward

$

1,946,835

 

 

$

1,934,775

 

 

 

 

 

 

 

 

 

Total deferred tax assets

 

1,946,835

 

 

 

1,934,775

 

Valuation reserve

 

(1,946,835

)

 

 

(1,934,775

)

 

 

 

 

 

 

 

 

Net deferred tax assets (liability)

$

—

 

 

$

—

 

 

As of December 31, 2022 and 2021, the Company had available for income tax purposes approximately $6.0 million and $9.1 million respectively in federal net operating loss carry forwards, which may be available to offset future taxable income. These loss carry-forwards expire in 2022 through 2040. The Company may be limited by Internal Revenue Code Section 382 in its ability to fully utilize its net operating loss carry forwards due to possible future ownership changes. Management has established a 100% valuation allowance against the net deferred tax asset since it appears more likely than not that it will not be realized.

 

The provision (benefit) for income taxes attributable to income (loss) from continuing operations does not differ materially from the amount computed at the federal income tax statutory rate.