Annual report pursuant to Section 13 and 15(d)

Note 8 - Income Taxes

v3.20.1
Note 8 - Income Taxes
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
8.
           Income Taxes
 
The tax effects of significant temporary differences representing deferred tax assets at
December 31, 2019
and
2018
are as follows:
 
   
2019
    
2018
  
Deferred tax assets (liabilities)
                
Net operating loss carryforwards
   $
916,200
     $
1,934,300
  
Accrued commissions
    
9,000
      
102,600
  
Accrued vacation
    
21,200
      
24,500
  
Fixed assets
    
(23,500
 )    
(24,100
 )
Other
    
3,700
      
6,400
  
Subtotal
    
926,600
      
2,043,700
  
Valuation allowance
    
(926,600
 )    
(2,043,700
 )
Total
   $
-
     $
-
  
 
The provision for income taxes is at an effective rate different from the federal statutory rate due principally to the following:
 
     
December 31,
  
     
2019
    
2018
  
Loss before taxes
   $
(717,246
 )   $
(51,034
 )
Income tax benefit on above amount at federal statutory rate
   $
(150,600
 )   $
(10,700
 )
State income tax benefit, net of federal benefit
    
(35,900
 )    
(2,600
 )
Permanent differences
    
2,900
      
8,600
  
Other
    
(1,300
 )    
(1,900
 )
NOL Expirations
    
1,302,000
      
2,015,100
  
Change in valuation allowance
    
(1,117,100
 )    
(2,008,500
 )
Provision for income taxes
   $
-
     $
-
  
 
Income tax expense for the years ended
December 31, 2019
and
2018
consists of the following:
 
     
December 31,
  
Current income taxes
  
2019
    
2018
  
Federal
   $
-
     $
-
  
State
    
-
      
-
  
Benefit from utilization of net operating losses
    
-
      
-
  
Subtotal
    
-
      
-
  
Deferred taxes
    
-
      
-
  
Provision for income taxes
   $
-
     $
-
  
 
The Company has recorded a valuation allowance to the full extent of its currently available net deferred tax assets which the Company determined to be
not
more-likely-than-
not
realizable. The Company has net operating loss carryforwards of approximately
$3.5
million, of which
$2.2
million will expire, if unused, between the years
2020
and
2036.
 
The Company
may
have been deemed to have experienced changes in ownership which
may
impose limitations on its ability to utilize net operating loss carryforwards under Section
382
of the Internal Revenue Code. However, as the deferred tax asset is fully offset by a valuation allowance, the Company has
not
yet conducted a Section
382
study to determine the extent of any such limitations.
 
The Company has analyzed its income tax positions using the criteria required by U.S. GAAP and concluded that as of
December 31, 2019
and
2018,
it has
no
material uncertain tax positions and
no
interest or penalties have been accrued. The Company has elected to recognize any estimated penalties and interest on its income tax liabilities as a component of its provision for income taxes.
 
The income tax returns of the Company for
2016,
2017,
and
2018
are subject to examination by income taxing authorities, generally for
three
years after each was filed.