Posted by: Taxlitigator | March 5, 2021

STEVEN TOSCHER, MICHEL STEIN and JONATHAN KALINSKI on Handling Cannabis Tax Examinations: Sec. 280E, Audits, IRS Guidance, Reporting Requirements

We are pleased to announce that Steven Toscher, Michel Stein and Jonathan Kalinski will be speaking at the upcoming Strafford webinar, “Handling Cannabis Tax Examinations: Sec. 280E, Audits, IRS Guidance, Reporting Requirements” on Wednesday, March 24, 2021, 1:00 pm-2:30 pm (EDT), 10:00 am-11:30 am (PDT).

This CLE/CPE webinar will provide tax counsel and advisers guidance on effective methods in handling IRS cannabis tax examinations for businesses engaged in the cannabis industry. The panel will discuss key federal and select state tax law provisions impacting marijuana businesses, key items of focus by the IRS when examining cannabis operations, and techniques in managing audits.

The sale and distribution of cannabis for recreational or medical use is a powerful economic engine generating billions in annual revenue, with over 40 states and the District of Columbia having some form of legalization of the substance. Despite state relaxation of marijuana prohibition laws, without careful planning, regulated cannabis businesses can be subject to hefty tax assessments and penalties.

Under Section 61, all gross income must be reported from whatever source it is derived. However, under Section 280E, cannabis businesses cannot deduct rent, wages, and other expenses unless it is for cost of goods sold (COGS), resulting in a substantially higher tax rate than other companies on their income. The IRS issued guidance to its agents on conducting audits of cannabis businesses giving IRS agents the authority to change a cannabis business’ accounting method. Under Section 280E, certain costs are not included in COGS. Thus, they remain non-deductible for income tax purposes.

As more states legalize cannabis and make available licenses to grow, manufacture, distribute, and sell cannabis, the IRS has increased cannabis tax audits, which could result in unbearable tax liabilities.

Listen as our panel discusses federal and select state tax law provisions impacting cannabis businesses, key items of focus by the IRS when examining cannabis operations, and tactics for managing audits. We are also pleased to announce that we will be able to offer a limited number of complimentary and reduced cost tickets for this program on a first come first serve basis. If you are interested in attending, please contact Sharon Tanaka at sht@taxlitigator.com

Click Here for more information.


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