Marijuana's Tax Paradox (or the Uncanny Cannabis Controversy) (Currently Unavailable)

The Untouchables never caught Al Capone – the IRS did. One of Al Capone’s big crimes was bootlegging – and not paying the tax on his illegal income. As you’ve guessed, illegal income is taxable. And yes, the income from marijuana sales is still illegal on the federal level. But on the state level, it’s perfectly legal. So, how do we prepare tax returns with this tax dichotomy?

Publication Date: March 2020

Designed For
Practitioners at all levels regardless of practice concentration, whose clients are venturing into the growing, selling, distribution of medical marijuana.

Topics Covered

• Types of Businesses Involved in Marijuana Sales
• Federal Enforcement Policies
• Your (legal) Clients' Key Tax Stumbling Blocks
• Overview of Sec 280E — IRS Law
• Where the IRS and State Agree
• Things to Never Do
• What to Do with Deductions the IRS Won't Allow
• Controls for Cash”Based Businesses
• Banking and Cash Problems = Payroll Tax Problems
• Sales Tax Issues
• Potential Forms to File ” FBAR, FATCA, 3520
• Landlord and Associated Business Problems
• Profitability

Learning Objectives

• Identify the reporting rules for state purposes
• Recognize the IRS filing rules without turning our clients into federal tax criminals
• Describe why banks won't allow medical marijuana-based businesses to open bank accounts
• Identify the IRS penalty for not paying payroll taxes electronically
• Recognize which Revenue Procedures and Regulations are related to inventory
• Describe an associated business
• Recognize common marijuana-related businesses
• Identify which costs are not deductible when it comes to the cost of inventory
• Describe valid exceptions allowing businesses that maintain an inventory to avoid using the accrual basis
• Identify which procedures are related to filing a "Protective Claim"

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None