IRS 280E: A Real Bummer For The Marijuana Industry

The sale or distribution of marijuana is still a crime under federal law.  The impact of IRC § 280E is to limit the taxpayer’s business deductions to the cost of goods sold.

BY LARRY J. BRANT As a general rule, in accordance with IRC § 162(a), taxpayers are allowed to deduct, for federal income tax purposes, all of the ordinary and necessary expenses they paid or incurred during the taxable year in carrying on a trade or business.  There are, however, numerous exceptions to this general rule.  One exception Read the full article…

Marijuana Businesses Are Raking In Money—And The IRS Will Take Most Of It

“States will do what they want, and the federal government will get out of the way.”

OREGON: The line along Southeast Hawthorne Boulevard looked like a windfall for Farma. A crowd started gathering outside the Portland medical-marijuana dispensary shortly before 10 am on Oct. 1, the first day of legal recreational pot sales in Oregon. By the end of the day, more than 250 customers at Farma bought weed at $70 a quarter-ounce. But Read the full article…

IRS Position On 502 Excise Taxes – “Don’t Count Excise Tax Amount As Income”

"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.

Rachel Kurtz WASHINGTON: Dean Guske, CPA to many marijuana businesses in Washington State (and around the country),  and his firm, Guske & Company, have been taking the position with their clients since the beginning of the year that the 502 excise taxes DO NOT have to be counted as income when 502 Cannabis businesses file their Read the full article…

Tax Time Hits Hard For Marijuana Businesses

Cannabis businesses face a different issue at tax time that a marijuana tax expert refers to as the 280E problem.

COLORADO:  It’s tax time and small business owners all over America are digging out their receipts for deductions, except marijuana business owners because most deductions aren’t for them. Some of the top tax deductions for small businesses include advertising, office supplies, utilities, business entertaining and legal fees. But cannabis businesses face an different issue that Read the full article…

IRS Advisory Council OKs Marijuana-related Businesses For Accountants

"With over 20 states allowing medical marijuana and now states beginning to legalize recreational marijuana, this industry needs qualified, ethical professionals to help them fulfill their income tax obligations." IRSAC concluded, "...tax professionals need reassurance regarding their own roles in giving tax advice to and preparing tax returns for such businesses."

DISTRICT OF COLUMBIA: On Wednesday the IRS Advisory Council (IRSAC) released a report making a number of observations and recommendations to the Internal Revenue Service and federal policy makers relating to the need for greater latitude and legal protections (under the current federal anti-marijuana laws) for tax professionals who choose to work for clients who are in Read the full article…

Marijuana Taxes in Colorado — An Early Clue

January collections will tell us next to nothing about what other states can expect, and only a little about Colorado.

COLORADO: Across America, lawmakers are eyeing tax revenue from legalized marijuana. Colorado and Washington are each officially expecting over $100 million annually in marijuana excise taxes. In a few days, the Colorado Department of Revenue is due to report how much marijuana tax was paid there for January, the first full month of recreational sales anywhere ever. But the report Read the full article…

IRS Manual Detailed DEA's Use of Hidden Intel Evidence

A slide from a presentation about a secretive information-sharing program run by the U.S. Drug Enforcement Administration's Special Operations Division (SOD) is seen in this undated photo.

DISTRICT OF COLUMBIA: Details of a U.S. Drug Enforcement Administration program that feeds tips to federal agents and then instructs them to alter the investigative trail were published in a manual used by agents of the Internal Revenue Service for two years.