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  1. Beenthere2Hippie
    The IRS’ auditors have been paying closer attention to the cannabis industry of late, says James Thorburn, an attorney with Thorburn Walker LLC in Greenwood Village, Colo.

    Thorburn, whose areas of practice include taxes and cannabis law, joins Cannabist editor-in-chief Ricardo Baca on The Cannabist Show to talk about tax issues — including IRS Code 280E, which limits deductions for cannabis businesses — that are playing out heavily in the marijuana industry.

    “Any business that is handling product is probably going to be subject to an audit,” Thorburn says. “It’s not a question of if at this time, it’s a question of when.”

    Politics, Thorburn says, are largely the reason for the uptick. He says he and others are involved in conversations with members of Congress to educate them about how the current tax code and tax laws are affecting businesses in legal cannabis states.

    For instance, he says, because of the all-cash nature of legal weed, businesses often have to file Form 8300, for the report of cash payments over $10,000.

    “It is the wholesale transactions among the businesses,” he says. “Because there might be five, 10, 20 pounds that (are in transaction) between two businesses and because of the problem with banking, the transaction is in cash.”

    Each of those transactions prompts the filing of a Form 8300.

    “Part of the problem has been that the industry, as a whole, has not been aware of this requirement,” he says.

    And that, Thorburn says, has triggered the slew of audits.

    For his clients in an audit, Thorburn recommends what he calls “cautious compliance.”

    “We know right now the Department of Justice is not pursuing prosecutions, but that doesn’t mean they can’t do it in the future,” he says.


    The Cannabist/Oct. 13, 2016
    http://www.thecannabist.co/2016/10/13/irs-marijuana-industry/63758/
    Photo: 420 College
    Newshawk Crew

    Author Bio

    Beenthere2Hippie
    BT2H is a retired news editor and writer from the NYC area who, for health reasons, retired to a southern US state early, and where BT2H continues to write and to post drug-related news to DF.

Comments

  1. monkeyspanker
    While we all here are proud of the new laws that permit these businesses to be allowed in some states in the US, we must remember that it is just that, a business. They should conduct themselves as such.

    That means reading the laws of your state, keeping all 'your ducks in a row', make sure every I has a dot over it and every T is crossed. It is sad that these particular businesses will be under extra scrutiny but, that's a small price to pay for our new found gains in changing US drug policy. Just my thoughts.

    M~
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