IRS Rejects Watchdog Recommendation To Provide Marijuana Business Tax Guidance

IRS Rejects Watchdog Recommendation To Provide Marijuana Business Tax Guidance

A new Treasury Department internal watchdog report criticizes the Internal Revenue Service (IRS) for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. In its review of IRS policy with respect to cannabis businesses, the Treasury Inspector General for Tax Administration (TIGTA) found that IRS is missing millions of dollars in tax assessments in state-legal markets and that taxpayers experience a significant impact due to an federal tax code known as 280E that prevents marijuana companies from making business deductions that are available to other industries. Part of the solution, TIGTA said, should be for IRS to “develop and publicize guidance specific to the marijuana industry.” “Such guidance would improve awareness of tax filing requirements for taxpayers in this industry, such as the correct application of” the policy, “which would reduce the burden of tracking inventory for certain small businesses,” the report, which was released on Monday, states. 280E has long been a source of intense hardship and frustration for the industry. First enacted in the 1980s as a way to block cartel kingpins from writing off yachts and fancy cars, it stipulates that businesses are ineligible for certain deductions if their income is derived from an illegal drug that falls under Schedule I or II of the Controlled Substances Act. While they may qualify for state-level deductions, the federal restriction ultimately means that marijuana businesses are subject to a significantly higher taxable income, increasing their effective tax rate up to around 70 percent.…

Excerpt only …
READ MORE BELOW
Source : MJ moment
Link to original : IRS Rejects Watchdog Recommendation To Provide Marijuana Business Tax Guidance
reposted by Cannabis News World

This site uses Akismet to reduce spam. Learn how your comment data is processed.