What Every Cannabis Business Needs To Know About IRS Form 8300

By Dean Guske, CPA

I have received a number of emails and phone calls over the past couple of days regarding the article posted in MJ Biz Daily on Tuesday.  I was actually contacted last week by the author who wanted to know if I was seeing any audit activity in Washington and Oregon in this regard and I indicated that I had not.  He was curious as to why there was so much activity in Colorado around this issue as well.  It’s my understanding that there are quite a few IRS audits in progress in Colorado and that activity has been going on for a while.  I think this is due in part to several cannabis businesses there not following 280E when filing their federal income tax returns.  280E is unfair but unfortunately it’s the law we have to deal with for now.  At some point this will be behind us.

The 8300 audits were news to me and so far seem to be concentrated in Colorado.  My thought is that because of all the other audit activity in Colorado that this is just a follow on audit to make sure these businesses are compliant with ALL reporting requirements.

I have include a copy of Form 8300 with instructions here for your reference. I have also attached an overview of the penalties associated with not filing the form as well.

The bottom line is this.  If you any person in a trade or business receives a payment of $10,000 or more in any single transaction or series of transactions they are required to file a form 8300 within 15 days of receiving the cash.  Please note that a “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate.  You should also be aware that “cash”  includes cashier’s checks, money orders, bank drafts and traveler’s checks.

In addition to filing Form 8300 with the IRS, companies need to furnish a written statement to each person whose name is required to be included in the Form 8300 by January 31 of the year following the transaction. This statement must include the name, address, contact person, and telephone number of the business filing Form 8300, the aggregate amount of reportable cash the business was required to report to the IRS from the person receiving the statement, and that the business provided this information to the IRS.

Filing form 8300 isn’t something anyone should be afraid of. Not filing the form is much worse.  If you have any questions or need any additional information, please feel free to call..

 

Have a great weekend.