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Income Taxes
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes consists of the following at December 31, 2022 and 2021:
 20222021
Current tax provision$— $— 
Deferred tax benefit— — 
Total tax benefit$— $— 

A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows:
 20222021
Federal statutory rate21 %21 %
State income tax rate, net of federal benefit%%
Permanent differences— %%
Change in valuation allowance(24 %)(25 %)
 — %— %

Deferred Income Taxes
 
Deferred income taxes are the result of temporary differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items and net operating loss carry-forwards.

When required, we record a liability for unrecognized tax positions, defined as the aggregate tax effect of differences between positions taken on tax returns and the benefits recognized in the financial statements. Tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. We have no uncertain tax positions that require the us to record a liability. Our federal income tax returns are subject to examination by the IRS, generally for three years after they are filed.
 
We assess temporary differences resulting from different treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded in the consolidated balance sheets. We evaluate the realizability of our deferred tax assets on a regular basis, an exercise that requires significant judgment. In the course of this evaluation we considered our recent history of tax losses, the economic conditions in which we operate, recent organizational changes and our forecasts and projections. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a valuation allowance for a significant portion of the net deferred tax assets that may not be realized as of December 31, 2022 and 2021.
The following is a schedule of the deferred tax assets and liabilities as of December 31, 2022 and 2021:
 20222021
Deferred tax assets:  
Net operating loss carry forward$36,506,618 $33,727,960 
Intangible assets543,000 585,500 
Accrued expense287,600 239,800 
Deferred rent3,000 3,800 
Allowance for doubtful accounts403,800 56,900 
Stock compensation expense869,900 610,900 
Unrecognized Income/Loss122,100 — 
Other373,100 351,500 
Subtotal39,109,118 35,576,360 
Less valuation allowance(37,976,018)(33,988,760)
Total1,133,100 1,587,600 
Deferred tax liabilities:  
Intangible assets and property and equipment1,242,200 1,373,300 
Other(2,100)321,300 
Total1,240,100 1,694,600 
Total deferred tax liabilities$(107,000)$(107,000)
 
The net operating losses amounted to approximately $101,260,617 and expire beginning 2023 through 2037. Included in the federal net operating loss carryforwards are $22.5 million generated from 2018 to 2022 that will not expire and are limited to offset 80% of our taxable income for years beginning after December 31, 2020.

As of December 31, 2022, the Company has a net deferred tax liability of $107,000. The net deferred tax liability is due to goodwill that is amortized for tax purposes and a trade name that has an indefinite life, of which both are not being amortized for book purposes.

The deferred tax liability relating to goodwill can only be offset up to 80% by NOLs generated in tax years ending December 31, 2018 and beyond, as well as NOLs available after consideration of IRC Section 382 limitation. The remaining portion that cannot be used remains as a liability. In future years, if the deferred tax assets are determined by management to be “more likely than not” to be realized, the recognized tax benefits relating to the reversal of the valuation allowance as of December 31, 2022 will be recorded.

Under the provisions of the Internal Revenue Code, the net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

The Company remains open to examination by the Internal Revenue Service for the years ending December 31, 2018 through 2021. Carryforward attributes generated in all years since inception remain subject to adjustment. Our state income tax returns are open to audit under the statute of limitations for the same periods.