Can You Have Your Pipe and Smoke It Too?

The cannabis industry is booming and continues to garner mainstream acceptance as more and more states contemplate legalizing it.

What many cannabis business owners need to be aware of, but often are not, is that there are very specific rules outlined in the IRS's tax code of which they must be in compliance. Specifically, Section 280E, which bars 'drug traffickers' from taking business expense deductions on their taxes. In other words, cannabis entrepreneurs must pay taxes on ALL of their revenue, without the benefit of being able to use business expenses to reduce their taxable income. The only exception being the cost of acquiring the product intended to be sold. All other 'costs of doing business' cannot be filed as a deduction.

As long as marijuana is considered illegal under Federal law, cannabis businesses, even in states where it has been legalized, are barred from reaping the full tax benefits of other businesses.

There are financial experts that cannabis entrepreneurs should seek out as soon as possible that can navigate them through the murky waters of the Tax Code and keep them off the IRS and State Authorities' radar. Cannabis business-centric firms like cannabistaxsolutions.com know what red flags can trigger an audit (and how to avoid them), how to properly prepare income tax returns and also provide accurate monthly financial reporting. Engaging the services of such a firm can end up saving you big money in potential IRS penalties and interest and safeguard your business from being shut down for outstanding tax debt.

Note: If you're an entrepreneur in the cannabis industry, and your business is currently on the IRS's chopping block, DO NOT TRY TO DEAL WITH THEM ON YOUR OWN! They are incredibly adept at extracting information, and you could end up saying the wrong thing and making your situation worse. You should instead hire the services of an expert in cannabis taxing and accounting to deal with the IRS on your behalf. Firms like cannabistaxsolutions.com advocate for their clients, and they know what to say and what not to say to get you the best possible resolution.

https://www.law.com/nationallawjournal/2019/03/05/the-irs-keeps-winning-marijuana-cases-in-us-appeals-courts/

Adele probably wasn't referencing the IRS in her epic hit 'Hello', but the line fits all the same. The Shutdown of December 2018/January 2019 left a lot of wreckage in its wake, but the fallout was particularly disastrous at the IRS, having created an enormous backlog of work that some are saying may take over a year to catch up with.

By the time the shutdown ended, the IRS faced the following:

More than 5 million pieces of mail that hadn’t been batched for processing.

80,000 unaddressed responses to Earned Income Tax Credit (EITC) audits from the previous tax season, some of which included frozen tax refunds.

87,000 amended returns that still needed to be processed.

Taxpayers who desperately needed their frozen tax refunds or required relief from an IRS penalty had nowhere to turn during the shutdown, the report found. No IRS employee or TAS employee – which advocate for taxpayers – were authorized to work to assist a taxpayer experiencing a hardship because of the IRS.
The IRS chief counsel said that these functions didn’t meet the requirements for the “safety of life” exception under the Anti-Deficiency Act.

“Neither of these exceptions would allow personnel to be excepted to issue a refund or release a levy in order to allow the taxpayer to obtain access to funds to receive a life-saving operation, for example,” the report stated. “Nor could the IRS use resources to release a levy where it is depriving the taxpayer of funds to pay for basic living expenses, even if the levy could leave the taxpayer homeless.”

Maybe the only thing scarier than trying to call the IRS on your own is trying to call them after you find out they levied your bank account or garnished your wages AND NOW YOU CAN'T REACH ANYONE WHO CAN HELP! The IRS's average hold time to speak to a live person in Collections has substantially increased since the shutdown, and it was long and tedious to begin with!

We can have the IRS on the phone in minutes for our clients. If you're having issues with the IRS - you owe a lot money from back taxes or you have years of unfiled returns, or you're a business owner with payroll tax problems - we can help. Call us now for a free IRS transcript investigation and analysis at 855-477-2255.

★★★★★
2/13/19

After doing a little research and reading a few reviews on the BBB website, I contacted RushTax to help me with my dire tax situation and after just one phone call I knew I made the right choice. I spoke with Joe and explained the mess I created and he assuaged my fears and assured me I was in good hands. And as God is my witness, RushTax was there for me and my family in ways I could ever imagine. The owner of the firm was available to me when and if I needed, but it was with Joe (my primary contact) and Shadi, the tax lawyer who personally handled my case, that I felt cared for and protected from start to finish. These people CARE about their clients and will fight for you no matter how bad you perceive your case to be. Shadi worked tirelessly on my case, was available day or night (even on weekends sometimes) and never made any promises that she did not intend on seeing all the way through. I feel truly indebted to her and Rush Tax and thankful that I was fortunate to have them advocate for me and to get me the resolution I desperately hoped would be possible and they delivered 100%. If you are lucky enough to be able to retain Rush Tax and to work with Shadi and the other great people at this firm, please do not waste another moment of your life and reach out to them as soon as possible. I hope this review finds you and that you heed this advice and call Rush Tax today...you won't regret it I promise you. I'm indebted to them forever.

https://www.yelp.com/biz/rush-tax-resolution-woodland-hills