Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

15. Income Taxes

The large accumulated losses from past operations have resulted in the Company determining that the deferred tax assets associated with net operating loss carryforwards may expire prior to utilization. Because of the uncertainty of realization of any tax assets, the Company provided a full valuation allowance against its net deferred tax assets at December 31, 2015 and 2014. Consequently, no benefit for deferred tax assets appears on the Company’s financial statements.

The Company’s income tax expense is summarized as follows:

	2015		2014
Provision for income taxes
US Federal	$	-	$	-
US States		3,800		-
Current provision		-		-
Change in deferred income taxes		-		-
Total provision for income taxes	$	3,800	$	-

The difference between the actual income tax provision and the tax provision computed by applying the statutory US federal and United Kingdom income tax rates to earnings before taxes is attributable to the following:

	2015			2014
US Federal income tax expense (benefit) at 34%	$	(516,700	)	$	(828,000	)
US State income tax expense (benefit)		(101,200	)		(136,100	)
United Kingdom income tax expense (benefit) at 20%		75,000			179,100
Nondeductible expenses		13,600			13,300
Expiration of net operating loss carryforwards		29,800			293,500
Other		174,400			147,000
Change in valuation allowance		328,900			331,200
Total	$	-		$	-

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are as follows:

	2015			2014
Benefit of net operating loss carryforwards	$	6,159,300		$	5,601,600
Depreciation and amortization		(1,581,400	)		(1,630,400	)
Other		81,000			358,800
Subtotal		4,658,900			4,330,000
Less valuation allowance		(4,658,900	)		(4,330,000	)
Total	$	-		$	-
Change in valuation allowance	$	328,900		$	331,200

The Company has net operating losses available for carry forward. The US Federal net operating losses total approximately $17,021,100 and expire beginning 2018 and ending in 2035. The US state operating losses total approximately $1,547,400 and expire beginning in 2016 and ending in 2035. The Company’s UK operating losses total approximately $1,176,900 and do not expire.

Tax years that remain open for examination by the Internal Revenue Service and the US states include 2012 through 2015. California and New York may still examine 2011 as well. The Company expects to file its 2015 returns in the summer of 2016. Additional years may be examined in the event of criminal tax fraud, and any year may be subject to examination to the extent that the Company utilizes the net operating losses from those years in its current or future tax returns.