Income Taxes

3 Months Ended

Mar. 31, 2023

Income Taxes [Abstract]

INCOME TAXES

5. INCOME TAXES

On December 22, 2017 U.S. tax reform legislation known as the Tax Cuts and Jobs Act (the “2017 Act”) was signed into law. The 2017 Act made substantial changes to U.S. tax law, including a reduction in the corporate tax rate from 34% to 21%, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate expensing of capital expenditures, deemed repatriation of foreign earnings through a transition tax and significant changes to the taxation of foreign earnings going forward. As a result of the 2017 Act, NOL carryforwards generated in years beginning after December 31, 2017 would carryforward indefinitely, and would apply to 80% of future taxable income. Under the Act, carrybacks of NOLs were disallowed. In March 2021, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted providing a five-year carryback for losses incurred in 2018, 2019, 2020 or 2021, which allows companies to modify tax returns up to five years prior to offset taxable income from those tax years. The CARES Act also suspended the NOL limit of 80% of taxable income, but the NOLs generated in 2018 and forward will still carryforward indefinitely.

The composition of deferred tax assets at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023 (Restated)			December 31, 2022
Deferred tax assets
Benefit from carryforward of net operating loss	$	2,344,946		$	2,333,496
Less valuation allowance		(2,344,946	)		(2,333,496	)
Net deferred tax asset	$	—		$	—

The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 21% were applied to pre-tax loss for 2023 and 2022, is attributable to the valuation allowance.

At March 31, 2023, for federal income tax reporting purposes, the Company has $9,108,809 in unused net operating losses available for carryforward to future years which will expire in various years through 2037, and $2,057,602 that will carryforward indefinitely.