Budz Accounting

07/15/2021

The IRS is coming after small businesses! Cannabis businesses have a higher risk of audit due to not having access to banking services that all other businesses have, thus resulting in a very cash-heavy business. The IRS views this as being ripe for hiding taxable revenue since cash is less traceable. A cannabis business needs controls in place to properly account for the cash and tie it out to other reports properly, which will help pass the audit.

The Internal Revenue Service is already staffing up, hiring thousands of new auditors in preparation for a tax-enforcement push that’s a key financing element of President Biden’s infrastructure plan. IRS officials said at a tax conference Friday that they are adding about 2,000 new employees, i...

07/15/2021

IRS Code 280e is so important to cannabis companies. Since cannabis is still illegal at the federal level - despite many states passing laws to make medical and/or recreational use legal - cannabis companies are very limited in what they are allowed to deduct on their tax return. Most generalist accountants miss this and cause their cannabis clients to have unnecessary risk by treating them as any other tax and accounting client. I have even seen examples where typical tax planning for a cannabis client causes tax liabilities to exceed what it would have been had no "planning" been done. If you are in the cannabis business, you really need to be working with an accountant that specializes in cannabis accounting.