INCOME TAXES

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 16 INCOME TAXES

The Company did not provide for income taxes with respect to differences between financial loss and taxable loss arising from the timing of when certain transactions are recorded for book purposes versus tax purpose. The Company has not filed federal or state income tax returns since 2012. The financial statements do not reflect any fines or penalties that may or may result from not filing the various income returns.

In prior years the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. For the 2019 tax year the Company had net operating loss carryforwards of approximately $44,100,000 for tax purposes. The net operating loss carryforwards prior to 2018 carryforward for 20 years. Realization of the deferred tax benefit related to the carryforward is dependent upon the Company generating sufficient taxable income in the future, against which the loss can be offset, which is not guaranteed.

Deferred income taxes reflect the net tax effect of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as tax benefits of net operating loss carryforwards. The significant components of the Company’s deferred tax assets and liabilities relate to the following:

	2019			2018
Net operating loss carryfoward	$	44,166,385		$	40,910,571
Depreciation		—			—
Net deferred tax assts and before valuation allowance		44,166,385			40,910,571
Less: Valuation allowance		(44,166,385	)		(40,910,571	)
Net deferred tax assets	$	—		$	—

For financial reporting purposes, the Company has incurred losses in previous years. Based on the available objective evidence, including the Company’s previous losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets as of December 31, 2019 and 2018.

The effective income tax rate varied from the statutory Federal tax rate as follows:

	2019			2018
Federal statutory rate		21	%		21	%
Effect of net operating losses		(21	)%		(21	)%
Effective income tax rate		—	%		—	%

The company’s effective tax rate is lower than what would be expected if the federal statutory rate were applied to income (loss) before taxes, primarily due to net operating loss carryforwards.