While parts of California enjoy at least being tolerated by law enforcement and the protection of its Medical Marijuana laws, there is one constant that must always be respected. The three biggest letter in the adult alphabet....IRS. The IRS can take down even the most well managed and efficent medical marijuana dispensary if they are not compliant with federal tax laws.According to Forbes columnist Robert W. Wood, the agency is relying on Internal Revenue Code Section 280E, which "precludes deductions for any business trafficking in controlled substances." While dispensaries are legal in some states, including California, marijuana trafficking remains illegal on a federal level. The IRS is arguing that normal business expenses that most companies can deduct on their taxes are not applicable to dispensaries.
The Marin Alliance for Medical Marijuana in Fairfax, Calif., was the first dispensary to be hit with this ruling earlier this year. Founder Lynette Shaw told the Marin Independent Journal of California that the IRS audited the company's returns for 2008 and 2009 and disallowed all of the alliance's business deductions such as buying marijuana, hiring employees, and renting office space. Shaw did not disclose the amount the IRS told her she owes, but she described it as "a staggering sum" totaling several million dollars.
The best advice- add a medical marijuana accountant to your team. He/she will more than pay for itself.
Its the cost of doing business. "This is the business we've chosen."
The best advice- add a medical marijuana accountant to your team. He/she will more than pay for itself.
Its the cost of doing business. "This is the business we've chosen."
