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Income Tax
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 12 — INCOME TAX


Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.


Net deferred tax assets consist of the following components as of December 31:


   2020   2019 
Deferred Tax Assets:          
NOL Carryover  $1,790,700   $1,195,800 
Payroll accrual   -    7,500 
Allowance for Doubtful Accounts   10,300    10,300 
Related party accrual   -    145,900 
Depreciation and amortization   467,658    253,327 
Less valuation allowance   (2,268,658)   (1,612,827)
Net deferred tax assets  $—   $— 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax income from continuing operations for the period ended December 31, due to the following:


   2020   2019 
Book loss  $(373,000)  $(282,000)
State taxes   (107,000)   (81,000)
Meals and entertainment   800    1,200 
Stock based compensation   135,600    71,600 
Other adjustments   (368,891)   53,481 
Adjustment to deferred tax asset        (198,108)
Valuation allowance   712,491    434,827 
   $—   $— 

At December 31, 2020, the Company had operating loss carry forwards of approximately $6,630,000, $3,415,000 of which expire from 2021 – 2040, and no expiration on the remaining amount. In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s net operating loss carryforwards may be limited in the event of a change in ownership. A full Section 382 analysis has not been prepared and NOLs could be subject to limitation under Section 382.


The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the years ended December 31, 2020 and 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position in the next twelve months.


The Company files income tax returns in the U.S. federal jurisdiction, New York and Georgia which remain subject to examination by the various taxing authorities beginning with the tax year ended December 31, 2017 (or the tax year ended December 31, 2001 if the Company were to utilize its NOLs). No tax audits were commenced or were in process during the years ended December 31, 2020 and 2019.