Income Taxes

Provision (Benefit) for Income Taxes

The provision for income taxes consists of the following:



	2014			2013
Current tax provision	$	236,403		$	—
Deferred tax (benefit) provision	(236,403		)	(310,097		)
Total tax (benefit) provision	$	—		$	(310,097	)

A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows:



	2014		2013
Expected statutory rate	34	%	(35	%)
State income tax rate, net of federal benefit	8	%	(4	%)
Permanent differences	—	%	(4	%)
Valuation allowance	(12	%)	(2,708	%)
Net operating loss adjustment	(30	%)	2,657	%
Other	—	%	26	%
	—	%	(68	%)

Deferred Income Taxes

Deferred income taxes are the result of temporary differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items and net operating loss carry-forwards.

We assess temporary differences resulting from different treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded in the consolidated balance sheets. We evaluate the realizability of our deferred tax assets on a regular basis, an exercise that requires significant judgment. In the course of this evaluation we considered our recent history of tax losses, the economic conditions in which we operate, recent organizational changes and our forecasts and projections. We believe it is more likely than not that none of our deferred tax assets will be realized, and we have recorded a full valuation for the net deferred tax assets as of December 31, 2014 and 2013.

The following is a schedule of the deferred tax assets and liabilities as of December 31, 2014 and 2013:



	2014			2013
Deferred tax assets:
Net operating loss carry forward	$	34,176,741		$	22,757,000
Intangible assets	4,435,700			6,425,000
Deferred rent	46,300			33,000
Depreciation	164,100			779,000
Allowance for doubtful accounts	48,800			57,000
Accrued expense	746,700			—
Stock based expenses	1,493,100			1,239,000
Other	24,200			540,000
Subtotal	41,135,641			31,830,000
Less valuation allowance	(41,135,641		)	(31,830,000		)
Total	—			—
Deferred tax liabilities:
Intangibles	3,523,000			3,788,903
Other	29,500			—
Total	3,552,500			3,788,903
Total deferred tax assets (liabilities)	$	(3,552,500	)	$	(3,788,903	)

The net operating losses amounted to approximately $78,605,000 and expire beginning 2022 through 2033.

We have accrued $506,453 for an uncertain tax position.

We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2010 through 2014. Our state income tax returns are open to audit under the statute of limitations for the same periods.

We recognize interest and penalties related to income taxes in income tax expense. We have incurred no penalties and interest for the years ended December 31, 2014 and 2013.