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Note S - Income Taxes
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
NOTE S
—INCOME TAXES
 
There was
no
provision for federal or state taxes as at
December 31, 2019
and
2018.
 
The Company has deferred taxes due to income tax credits, net operating loss carryforwards, and the effect of temporary differences between the carrying values of certain assets and liabilities for financial reporting and income tax purposes. Significant components of deferred taxes are as follows at
December 
31:
   
   
201
9
    
201
8
  
                 
Accrued compensation
   $
84,000
     $
91,000
  
Accounts receivable allowance
    
474,000
      
474,000
  
Stock-based compensation
    
894,000
      
644,000
  
Basis differences in fixed assets
    
(5,000
)
    
(13,000
)
Basis differences in intangible assets
    
62,000
      
50,000
  
Net operating loss and credit carryforwards
    
15,002,000
      
12,735,000
  
Valuation allowances
    
(16,511,000
)
    
(13,981,000
)
                 
    $ —     $ —  
 
The Company has a valuation allowance against the full amount of its net deferred taxes due to the uncertainty of realization of the deferred tax assets due to operating loss history of the Company. The Company currently provides a valuation allowance against deferred taxes when it is more likely than
not
that some portion, or all of its deferred tax assets will
not
be realized. The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income. Similarly, income tax benefits related to stock options exercised have
not
been recognized in the financial statements.
 
As of
December 
31,
2019,
the Company has federal net operating loss carryforwards of approximately
$70
million. Approximately
$55
million are subject to expiration between
2022
and
2037,
and
$15
million net operating loss carryforwards have
no
expiration date. These net operating loss carryforwards are subject to the limitations under Section 
382
of the Internal Revenue Code due to changes in the equity ownership of the Company. The Company has
3.6
million of state net operating loss carryforwards.
 
A reconciliation of the effective income tax rate on operations reflected in the Statements of Operations to the US Federal statutory income tax rate is presented below.
 
   
201
9
    
201
8
  
                 
Federal statutory income tax rate
    
21
%
    
21
%
Permanent differences
    
(2
)
    
—
  
Effect of net operating loss
    
(22
)
    
(21
)
                 
Effective tax rate
    
—
%
    
—
%
 
The Company has
not
been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The periods from
2016
through
2019
remain open to examination by the IRS and state jurisdictions. The Company believes it is
not
subject to any tax audit risk beyond those periods. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does
not
have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense incurred during the years ended
December 
31,
2019
and
2018.