Tax professionals who give advice to marijuana businesses in the states where marijuana is legal should not have to suffer adverse consequences because the businesses are illegal under federal law, recommends a new report from a key advisory council for the Internal Revenue Service.
The report, from the IRS Advisory Council, or IRSAC, contains a number of recommendations, including the status of the IRS’s efforts to regulate tax preparers.
“Marijuana businesses that are now legal in some states but still illegal under federal law need ethical and competent professional tax advice,” said the report. “Tax professionals who give that advice need assurance that they will not be adversely affected by the fact that the business is illegal under federal law.”
The IRSAC report pointed out that in January of this year, the state of Colorado legalized recreational marijuana businesses. By the end of March, there were 190 recreational marijuana businesses in Colorado, which are expected to gross $1 billion in sales this year. Marijuana businesses are required to file federal income tax returns but are not allowed to deduct all of their expenses under section 280E of the Tax Code, which prohibits deductions or credits for any amount paid or incurred in connection with the trafficking of controlled substances that are prohibited under federal law. [Read More]
Rob Meagher, CBE’s Founder, President and Editor-in-Chief is a 30 year veteran of the media world. His career has spanned from stints representing the Washington Post, USA Weekend, Reader’s Digest, Financial World & Corporate Finance to the technology world where he worked at International Data Group and Ziff Davis where he was part of the launch team for The Web Magazine, Yahoo Internet Life, Smart Business and Expedia Travels before starting his own marketing and Publisher’s Representative Firm. He also ran all print and online media sales and marketing for the Society for Human Resource Management before partnering with Forbes and then Fortune to create Special Sections covering a variety of topics. Rob, who started CBE Press in 2014, can be contacted at [email protected]
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