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Note 8 - Income Taxes
12 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
NOTE 
8.
INCOME TAXES
 
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC Topic
740.
The Company has made an early adoption of ASU
2015
-
17
Balance Sheet Classification of Deferred Taxes.
 
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.
 
The components of the deferred income tax assets and liabilities arising under ASC Topic
740
were as follows:
 
   
September 30,
 
   
2020
   
2019
 
                 
Deferred tax assets
  $
2,838,966
    $
2,438,893
 
Deferred tax liabilities
   
-
     
-
 
Valuation allowance
   
(2,838,966
)    
(2,438,893
)
                 
Net deferred tax assets/(liabilities)
 
$
-
   
$
-
 
 
The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:
 
   
Year Ended September 30,
 
   
2020
   
2019
 
   
Temporary Difference
   
Tax Effect
   
Temporary Difference
   
Tax Effect
 
                                 
Deferred tax assets
                               
Net operating loss
  $
709,343
    $
174,144
    $
4,903,668
    $
1,209,245
 
Tax impact true up    
-
     
20,927
     
-
     
-
 
Other temporary differences
   
835,040
     
205,002
     
(1,756,726
)    
(433,209
)
Net deferred tax assets
   
1,544,383
     
400,073
     
3,146,942
     
776,036
 
Valuation allowance
   
(1,544,383
)    
(400,073
)    
(3,146,942
)    
(776,036
)
Total deferred tax asset
   
-
     
-
     
-
     
-
 
                                 
Deferred tax liabilities
                               
Total deferred liability
   
-
     
-
     
-
     
-
 
Total net deferred tax asset
 
$
-
   
$
-
   
$
-
   
$
-
 
 
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.
 
At
September 30, 2020
and
September 30, 2019,
the Company had approximately and
$11,564,017
and
10,019,634
respectively, in unused federal net operating loss carryforwards, which will begin to expire principally in the year
2034.
A deferred tax asset at each date of approximately
$379,146
and
$776,036
resulting from the loss carryforwards and other temporary differences has been offset by a
100%
valuation allowance. The change in the valuation allowance for the period ended
September 30, 2020
and
September 30, 2019
was approximately $ (
400,073
) and $(
776,036
).
 
A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:
 
   
September 30,
 
   
2020
   
2019
 
                 
U.S. Federal statutory graduated rate
   
21.00
%    
21.00
%
State income tax rate, net of federal benefit
   
3.55
%    
3.66
%
Total rate
   
24.55
%    
24.66
%
                 
Less: Net operating loss for which no benefit is currently available
   
(24.55
)%    
(24.66
)%
Net effective rate
 
 
0.00
%
 
 
0.00
%
 
The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are
September 30, 2017,
2018,
and
2019.
In evaluating the Company's provisions and accruals, future taxable income, and reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.