November 23, 2014

IRS Advisory Council: Protect Tax Preparers Who Advise Marijuana Businesses

November 23, 2014
irs 280e medical marijuana deductions

irs 280e medical marijuana deductionsWhen many people think of the marijuana industry and the federal government, they don’t realize that there is more than just marijuana stores involved. There are a lot of facets to the marijuana industry and beyond. There are a lot of non-marijuana businesses that deal directly with the marijuana industry. The best two examples are attorneys and accountants. There has been a lot of debate about whether or not attorneys and accountants that advise marijuana businesses who are in direct violation of federal law are liable for prosecution themselves. The answer for attorneys, according to an advisory council for the IRS. Per Accounting Today:

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.”

As I saw someone say on Twitter, ‘that is great for accountants, but what about the marijuana industry itself!?’ Federal tax code is very unfriendly to the marijuana industry, which is one of the first things I’d imagine an accountant would tell you. 280e reform is something that everyone should research and support. If the marijuana industry is to truly reach its full potential, we can’t just stop at protecting accountants that advise marijuana businesses, we need to work towards helping the marijuana businesses themselves.


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