Atlas Lithium Corp Income Taxes Disclosure

NOTE 8 - INCOME TAXES

 

As of December 31, 2015, the Company had net operating loss carry forwards of approximately $6.9 million that may be available to reduce future years' taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

 

The provision for income tax consists of the following for the years ended December 31, 2015 and 2014:

 

		2015				2014
Current tax provision:
Federal		$	-			$	-
State			-				-
Foreign			-				27,809
			-				27,809
Deferred tax provision:
Federal, state and foreign		$	(638,611	)		$	(1,168,459	)
Permanent differences			149,732				130,613
Valuation allowance			488,879				1,037,846
Net provision for income tax		$	-			$	27,809

 

The cumulative tax effect at the expected rate of 34% of significant items comprising the Company's net deferred tax amount is as follows as of December 31, 2015 and 2014:

 

		2015				2014
Deferred tax asset attributable to:
Net operating loss carryover		$	2,415,586			$	1,926,707
Valuation allowance			(2,415,586	)			(1,926,707	)
Net deferred tax asset		$	-			$	-

 

Reconciliation of the U.S. federal statutory rate to the actual rate is as follows for the year ended December 31, 2015 and 2014:

 

US federal statuatory rate			34.00	%			34.00	%
Effects of:
Permanent differences			-7.97	%			-30.52	%
Valuation allowance			-26.03	%			-3.38	%
Net provision for income tax			0.00	%			0.10	%

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $6.9 million for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

The Company has identified the United States Federal tax returns as its "major" tax jurisdiction. The United States Federal return years 2011 through 2015 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination by the California Franchise Tax Board for the years ended 2011 through 2015 and currently does not have any ongoing tax examination. The last Company tax returns filed were for the year ended December 31, 2014, and an extension to file tx returns was filed with respect to the year ended December 31, 2015, a period for which the Company does not expect any tax liability