Header Right

Navigating IRS Audits of Cannabis Businesses

by

Anyone who has experienced an IRS audit understands that a federal tax audit can be a nerve racking experience. Even a routine run-of-the-mill audit can add a lot of unexpected stress on a business owner or a busy professional. An IRS audit of a cannabis business can be particularly stressful given the nuances involved in characterizing expenses, the cash nature of the cannabis businesses, and the inherent illegality (as far as the federal government is concerned) of cannabis businesses. However, if handled correctly, an IRS audit of a cannabis business need not be any more difficult than other business audit. [Read more…] about Navigating IRS Audits of Cannabis Businesses

IRS Investigations of Tax Return Preparers

by

Unlike many other countries, the U.S. has a voluntary tax compliance system. That means the federal and state governments rely on taxpayers, and their tax return preparers, to voluntarily report accurate tax items on their annual federal income tax returns. Filing false returns can lead to an audit and penalties in the best case scenario, and criminal prosecution and imprisonment in the worst case scenario. Moreover, a tax return preparer who recklessly or willfully files an improper return for a taxpayer can be subjected to civil and criminal liabilities. [Read more…] about IRS Investigations of Tax Return Preparers

A QUALIFIED DILEMMA: QOZ INVESTING BY CANNABIS BUSINESSES

by

THE SHORT ANSWER

Should Cannabis businesses invest in Qualified Opportunity Zones to defer paying capital gains tax and to benefit from a decade of tax free appreciation? This is a question often posed to me by clients in the Cannabis business. The answer is that it depends. While the law is unambiguous on its face, the IRS may  interpret a Cannabis exception under the Chevron Deference doctrine. In other words, the IRS may argue that while congress did not specifically exclude Cannabis businesses from this QOZ investing, this treatment would be irreconcilable with I.R.C. §280E, and thus a Cannabis exception should be read into the law anyway. [Read more…] about A QUALIFIED DILEMMA: QOZ INVESTING BY CANNABIS BUSINESSES

Does a C Corporation make sense for your business?

by

For most small business owners, choosing an LLC or an “S” Corp business entity has been a no brainer. For these entrepreneurs, the C word was associated with double taxation and, barring a unique non-tax consideration, it was to be avoided at all cost. That equation may have changed under the Tax Cuts and Jobs Act of 2017. [Read more…] about Does a C Corporation make sense for your business?

Do’s and Don’t of IRS Audits.

by


Dealing with the IRS can be a frightening experience, especially you’re representing yourself and have limited knowledge of the law and your rights.  Taxpayers often feel helpless against the heavy hand of the government and don’t know who to turn to. Should you seek the advice of a CPA or a tax attorney? Should you cooperate with the government and to what extent? What if you don’t have the requested documents? What if you’re guilty of a tax crime – such as unreported income or made up deductions? The answers to these questions can make the difference between a large tax bill and penalties, and possibly even criminal prosecution. Thus it is crucial that you seek the advice of a tax attorney when you’re first contacted by the IRS. Most often, when taxpayers seek the advice of tax attorneys after representing themselves first, the damage is already done. [Read more…] about Do’s and Don’t of IRS Audits.