IRS Official Offers Tax Advice To Marijuana Businesses And Says Feds Expect Industry To Keep GrowingPublished 1 day ago on September 28, 2021By Kyle Jaeger
The Internal Revenue Service (IRS) says it expects the marijuana industry to continue to grow, and it’s offering some tips to cannabis businesses on staying compliant with taxes while the plant remains federally prohibited.
In a blog post on Monday, IRS’s De Lon Harris said that the “evolving and complex issue my organization has been focused on is the tax implications for the rapidly growing cannabis/marijuana industry.”
“The specific rules and regulations regarding how [marijuana] is taxed at the federal level provides the IRS an opportunity to promote voluntary compliance, not only through audits, but also through outreach and education,” he said, noting the rapid expansion of state-legal cannabis markets. “And while there are 14 states that still ban cannabis use, we expect both unlicensed and licensed marijuana businesses to grow.”
“It’s tricky from a business perspective, because even though states are legalizing marijuana and treating its sale as a legal business enterprise, it’s still considered a Schedule 1 controlled substance under federal law,” Harris wrote. “That means a cannabis/marijuana business has additional considerations under the law, creating unique challenges for members of the industry.”
The official, who serves as commissioner of IRS’s Small Business/Self Employed (SB/SE) Examination division, recognized that the status quo means that marijuana businesses are forced to operate on a largely cash-only basis, and federal prohibition also means that companies in the sector are precluded to taking key tax deductions.
However, while the tax statute known as 280E means the industry is ineligible for most federal tax deductions and credits, he noted that marijuana firms “can deduct their cost of goods sold, which is basically the cost of their inventory.”
“What isn’t deductible are the normal overhead expenses, such as advertising expenses, wages and salaries, and travel expenses, to name a few,” Harris said. “I understand this nuance can be a challenge for some business owners, and I also realize small businesses don’t always have a lot of resources available to them.
The official previewed a new “Cannabis/Marijuana Initiative” the agency is launching that will provide specific job training to tax officials to effectively carry out audits within the industry, ensure that there’s consistency in the IRS’s policy for cannabis, work with stakeholders to ensure tax compliance and help to identify non-compliant businesses.
“I’m very focused on the success of this strategy because it’s very important for business owners to understand that under our nation’s tax laws, and specifically Internal Revenue Code 61, all income is taxable, even if someone is running a business that’s considered illegal under federal law,” he said. “This is a truly groundbreaking effort for our agency.”
“Our strategy is not limited to pushing information out via our website in the hope that business owners will find it. I’ve made it a priority for my SB/SE organization to engage with the cannabis/marijuana industry through speaking events and other outreach. I have done three of these types of events over the last year, and what I have heard is a genuine desire to comply with the tax laws regarding the industry. Through this extended outreach, we hope to help small business owners and others fully understand the unique tax rules before there are any compliance issues.”
“Since the unique circumstances of the cannabis industry can make tax preparation challenging, I hope that new and experienced business owners take my advice in this post and use our resources to ensure they understand their tax obligations and avoid penalties associated with non-compliance,” the blog post concludes. “We’re always here to help with tools, information and guidance.”
This is yet another signal that while marijuana remains federally illegal, agencies are increasingly recognizing that a policy shift is happening in states and may well be on the horizon at the congressional level.
As leadership in the House and Senate work to advance legislation to deschedule cannabis, lawmakers have also pushed to enact clear, statutory protections for financial institutions that work with state-legal marijuana businesses. And that would be accomplished through House-passed standalone legislation, or an amendment that was attached to a defense spending bill this week.
In the interim, banks and credit unions are operating under 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that lays out reporting requirements for those that choose to service the marijuana industry. FinCEN released a report last week showing that there were 706 financial institutions that said they were actively serving cannabis clients as of the last quarter.
IRS separately hosted a forum last month dedicated to tax policy for marijuana businesses and cryptocurrency.
The seminar, which was presented by a representative of the National Association of Tax Professionals (NATP), examined issues such as allowable tax deductions while cannabis remains federally illegal and how different states approach taxing marijuana. It also covered issues related to paying taxes on earnings in Bitcoin and other forms of digital currency.
Earlier this year, IRS Commissioner Charles Rettig told Congress that the agency would “prefer” for state-legal marijuana businesses to be able to pay taxes electronically, as the current largely cash-based system under federal cannabis prohibition is onerous and presents risks to workers.
Former Treasury Secretary Steven Mnuchin said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.
IRS released updated guidance on tax policy for the marijuana industry last year, including instructions on how cannabis businesses that don’t have access to bank accounts can pay their tax bills using large amounts of cash.
The update appears to be responsive to a Treasury Department internal watchdog report that was released earlier in the year. The department’s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to “develop and publicize guidance specific to the marijuana industry.”
Harris’s predecessor at IRS SB/SE also participated in an informational webinar in December, offering candid insights on a variety of cannabis industry issues from the federal perspective.
Source
When the IRS says we can make money at this then legalization is just around the corner. The IRS knows there is a lot of money involved in cannabis. Money the IRS wants in their coffers. As do the politicians. That means keep the the pressure on. Do not let up or give up.
Showing posts with label Internal Revenue Service (IRS). Show all posts
Showing posts with label Internal Revenue Service (IRS). Show all posts
Wednesday, September 29, 2021
Friday, April 10, 2015
Oppose forced unionism
From The National Right To Work Committee:
Please complete your 2015 Membership Ballot immediately.
It’s vital that you do so at once.
You see, every year your National Right to Work Committee surveys its members to make sure our programs line up with your priorities.
This year, with Obama appointees at the Federal Election Commission (FEC) and the Internal Revenue Service (IRS) emboldened to use any bureaucratic weapon in their arsenal to shut down your National Right to Work Committee, your participation is more important than ever.
When I last wrote to you warning of the threat posed by the Obama FEC and IRS, the response from Committee members was an overwhelming: "Fight On!"
As I explained, the FEC and IRS union boss water-carriers could bury your Right to Work Committee under a mountain of harassing subpoenas over our efforts to inform opponents of forced-unionism which Senators and Congressmen support Right to Work . . .
. . . And which ones don’t.
In the past, Big Labor’s cronies at the FEC have concocted rules which refuse to recognize that you are a "real" member of the National Right to Work Committee.
They have repeatedly insisted that you aren’t entitled to the same rights under the U.S. Constitution accorded to members of other organizations.
From what my attorneys tell me, the Committee’s position will be strongest if as many members as possible certify each year that they currently consider themselves to be members of the National Right to Work Committee.
As you know, the FEC bureaucracy attacked the Committee for exposing corruption involving candidates for federal office and top-level union officials.
That’s why your 2015 Membership Ballot -- demonstrating that we do have members -- may be essential in fighting off any retaliatory legal challenges to our membership.
Can you please take a few minutes to complete your 2015 Membership Ballot?
Completing your Membership Ballot is also very important for another reason.
In the next few weeks, I face some big decisions and I need your advice.
As you well know, in recent years, you and I have fought many battles with forced-unionism advocates in state legislatures and in Congress.
Right to Work supporters in Indiana and Michigan overcame Big Labor’s forced-dues-fueled leviathan and passed Right to Work laws, restoring to workers in these states the right to earn a living without having to pay dues and fees to a union boss.
And in Wisconsin, Big Labor took a huge hit when the state become America's 25th Right to Work state.
Then just think about the national battles you and I have had with Big Labor in the last several years.
Time and again, Card Check Forced-Unionism -- Big Labor’s favorite tool to corral workers into dues-paying ranks -- has reared its ugly head in Congress and in bureaucratic rule-making.
And let’s not forget the efforts of Right to Work members to force roll-call votes in the U.S. House and Senate on our National Right to Work Act.
Through petitions and postcards, phone calls, e-mails and letters to their Congressmen and Senators, opponents of forced-unionism have fought Big Labor’s forced-dues power.
Then in recent election years, you and folks like you mobilized a Right to Work citizen army to turn up the heat on candidates before the elections, demanding they pledge total opposition to forced-unionism.
And just look at what happened last year . . .
. . . Eight new pro-Right to Work Senators replaced forced-dues advocates, some of whom represented Big Labor’s interests for decades.
Now it’s up to you and me to build on our successes and move forward with the plan to put every member of Congress on record for or against compulsory unionism.
Unfortunately, as I try to budget for 2015, your National Right to Work Committee accounts have been drained -- first from our efforts to secure roll-call votes on the National Right to Work Act and then from last year’s massive 2014 Issue Education and Mobilization Program.
So I need your advice on allocating the Committee’s funds.
Should I emphasize a campaign for federal legislation rolling back Big Labor’s forced-unionism power in Congress?
Or should protecting and advancing Right to Work in the states be top priority?
Or should your Committee try to fight both nationally and on the state level?
Let me explain my dilemma.
With Right to Work gains in both the U.S. House and Senate, now is the time to put every member of Congress on record on the forced-unionism issue by forcing a roll-call vote in both Houses of Congress on the National Right to Work Act.
As you know, a National Right to Work law would mean that no worker could be forced to join or pay dues to a labor union just to get or keep a job.
And just getting a roll-call vote would be a win/win scenario for opponents of compulsory unionism.
After all, every time in the past five decades that Big Labor’s pet politicians have been exposed to the nearly 80% of Americans who think forced union dues are just plain wrong, they have gone down in flames at the ballot box.
And 2016 could be an even worse year for forced-dues advocates than 2014.
That’s why I believe you and I must do everything we can to FORCE Congress to go on record for or against the National Right to Work Act.
But this fight won’t be easy -- or cheap.
So I’m counting on your support, and your advice.
You see, in addition to battles in Congress, Right to Work supporters face some tough challenges as well as tremendous opportunities on the state level.
In addition to protecting Right to Work laws in Wisconsin, Michigan, Indiana, Iowa and Nevada, now is the time to use our momentum to extend Right to Work to other states like Kentucky, Montana, New Mexico, New Hampshire and Maine, as well as in a host of other states where the political climate is ripe for freeing workers from the shackles of forced-unionism.
The fact is, after years of hard work, two states, Indiana and Michigan, became Right to Work states in 2012 -- something that hasn’t happened since 1954!
If two states deep in the heart of the union boss dominated Rust Belt can pass Right to Work, I’m confident other states can as well.
So, should I emphasize a federal campaign, concentrating on forcing a roll-call vote on the National Right to Work Act?
Or should going on offense to pass new state Right to Work laws be our top priority?
Or should the Committee try to fight both nationally and on the state level?
Now, I’m sure you agree that it’s vital you and I do everything we can to put all members of Congress on record for or against forced-unionism.
So, if you think our federal legislative program should take priority, mark "FEDERAL LEGISLATION" on your Membership Ballot.
But before you do, give some thought to what’s at stake in the state legislatures.
Shouldn’t you and I strike while the iron is hot in states where it may be possible to pass Right to Work laws?
But we can’t leave current Right to Work states undefended in order to gain new ones.
So should defending state Right to Work laws and working to end forced-unionism in promising states be a top priority?
If you think so, mark "STATE LEGISLATION" on your ballot.
I’m sure you can see why I’m torn . . .
. . . And why I’m writing to ask you for your advice -- and, I hope, for your increased financial support.
Unless I can generate a major influx of funds at the beginning of this year, I will be forced to cut back on both federal and state legislative programs.
The fact is, with the tremendous opportunities you and I have in the current political climate, abandoning the field now would be heartbreaking.
With 11 million American workers shouldering Big Labor’s yoke, you and I cannot give up the fight now.
So can I count on you to chip in with a contribution NOW equal to or even larger than $10?
Thanks to the Committee’s 2014 Issue Education and Mobilization Program, you and I are now closer than ever to forcing votes on -- and ultimately passing -- a National Right to Work Law to free workers nationwide from the shackles of compulsory unionism.
That’s why I hope I can count on you to reach deep and make a contribution large enough for us to keep fighting in Congress and the state legislatures.
And why I hope you’ll consider chipping in with a generous contribution of $10, $20, or at least $30.
But whatever you can afford, please send it right away so I’ll know how to budget for the coming year.
Your advice and support are critical, so please submit your 2015 Membership Ballot as soon as possible. The Board of Directors and I anxiously await your reply.
Sincerely,
Mark Mix
President
P.S. Your completed 2015 Membership Ballot may be essential in a court battle to protect the rights of members like you.
I need to hear from 100% of our membership. Please act today.
Along with your ballot, please chip in with a generous contribution of $10, $20, or at least $30. Without your support right now, you and I may miss a real opportunity to take the fight directly to Big Labor.
So, please sign your Membership Ballot with your contribution today.
Please complete your 2015 Membership Ballot immediately.
It’s vital that you do so at once.
You see, every year your National Right to Work Committee surveys its members to make sure our programs line up with your priorities.
This year, with Obama appointees at the Federal Election Commission (FEC) and the Internal Revenue Service (IRS) emboldened to use any bureaucratic weapon in their arsenal to shut down your National Right to Work Committee, your participation is more important than ever.
When I last wrote to you warning of the threat posed by the Obama FEC and IRS, the response from Committee members was an overwhelming: "Fight On!"
As I explained, the FEC and IRS union boss water-carriers could bury your Right to Work Committee under a mountain of harassing subpoenas over our efforts to inform opponents of forced-unionism which Senators and Congressmen support Right to Work . . .
. . . And which ones don’t.
In the past, Big Labor’s cronies at the FEC have concocted rules which refuse to recognize that you are a "real" member of the National Right to Work Committee.
They have repeatedly insisted that you aren’t entitled to the same rights under the U.S. Constitution accorded to members of other organizations.
From what my attorneys tell me, the Committee’s position will be strongest if as many members as possible certify each year that they currently consider themselves to be members of the National Right to Work Committee.
As you know, the FEC bureaucracy attacked the Committee for exposing corruption involving candidates for federal office and top-level union officials.
That’s why your 2015 Membership Ballot -- demonstrating that we do have members -- may be essential in fighting off any retaliatory legal challenges to our membership.
Can you please take a few minutes to complete your 2015 Membership Ballot?
Completing your Membership Ballot is also very important for another reason.
In the next few weeks, I face some big decisions and I need your advice.
As you well know, in recent years, you and I have fought many battles with forced-unionism advocates in state legislatures and in Congress.
Right to Work supporters in Indiana and Michigan overcame Big Labor’s forced-dues-fueled leviathan and passed Right to Work laws, restoring to workers in these states the right to earn a living without having to pay dues and fees to a union boss.
And in Wisconsin, Big Labor took a huge hit when the state become America's 25th Right to Work state.
Then just think about the national battles you and I have had with Big Labor in the last several years.
Time and again, Card Check Forced-Unionism -- Big Labor’s favorite tool to corral workers into dues-paying ranks -- has reared its ugly head in Congress and in bureaucratic rule-making.
And let’s not forget the efforts of Right to Work members to force roll-call votes in the U.S. House and Senate on our National Right to Work Act.
Through petitions and postcards, phone calls, e-mails and letters to their Congressmen and Senators, opponents of forced-unionism have fought Big Labor’s forced-dues power.
Then in recent election years, you and folks like you mobilized a Right to Work citizen army to turn up the heat on candidates before the elections, demanding they pledge total opposition to forced-unionism.
And just look at what happened last year . . .
. . . Eight new pro-Right to Work Senators replaced forced-dues advocates, some of whom represented Big Labor’s interests for decades.
Now it’s up to you and me to build on our successes and move forward with the plan to put every member of Congress on record for or against compulsory unionism.
Unfortunately, as I try to budget for 2015, your National Right to Work Committee accounts have been drained -- first from our efforts to secure roll-call votes on the National Right to Work Act and then from last year’s massive 2014 Issue Education and Mobilization Program.
So I need your advice on allocating the Committee’s funds.
Should I emphasize a campaign for federal legislation rolling back Big Labor’s forced-unionism power in Congress?
Or should protecting and advancing Right to Work in the states be top priority?
Or should your Committee try to fight both nationally and on the state level?
Let me explain my dilemma.
With Right to Work gains in both the U.S. House and Senate, now is the time to put every member of Congress on record on the forced-unionism issue by forcing a roll-call vote in both Houses of Congress on the National Right to Work Act.
As you know, a National Right to Work law would mean that no worker could be forced to join or pay dues to a labor union just to get or keep a job.
And just getting a roll-call vote would be a win/win scenario for opponents of compulsory unionism.
After all, every time in the past five decades that Big Labor’s pet politicians have been exposed to the nearly 80% of Americans who think forced union dues are just plain wrong, they have gone down in flames at the ballot box.
And 2016 could be an even worse year for forced-dues advocates than 2014.
That’s why I believe you and I must do everything we can to FORCE Congress to go on record for or against the National Right to Work Act.
But this fight won’t be easy -- or cheap.
So I’m counting on your support, and your advice.
You see, in addition to battles in Congress, Right to Work supporters face some tough challenges as well as tremendous opportunities on the state level.
In addition to protecting Right to Work laws in Wisconsin, Michigan, Indiana, Iowa and Nevada, now is the time to use our momentum to extend Right to Work to other states like Kentucky, Montana, New Mexico, New Hampshire and Maine, as well as in a host of other states where the political climate is ripe for freeing workers from the shackles of forced-unionism.
The fact is, after years of hard work, two states, Indiana and Michigan, became Right to Work states in 2012 -- something that hasn’t happened since 1954!
If two states deep in the heart of the union boss dominated Rust Belt can pass Right to Work, I’m confident other states can as well.
So, should I emphasize a federal campaign, concentrating on forcing a roll-call vote on the National Right to Work Act?
Or should going on offense to pass new state Right to Work laws be our top priority?
Or should the Committee try to fight both nationally and on the state level?
Now, I’m sure you agree that it’s vital you and I do everything we can to put all members of Congress on record for or against forced-unionism.
So, if you think our federal legislative program should take priority, mark "FEDERAL LEGISLATION" on your Membership Ballot.
But before you do, give some thought to what’s at stake in the state legislatures.
Shouldn’t you and I strike while the iron is hot in states where it may be possible to pass Right to Work laws?
But we can’t leave current Right to Work states undefended in order to gain new ones.
So should defending state Right to Work laws and working to end forced-unionism in promising states be a top priority?
If you think so, mark "STATE LEGISLATION" on your ballot.
I’m sure you can see why I’m torn . . .
. . . And why I’m writing to ask you for your advice -- and, I hope, for your increased financial support.
Unless I can generate a major influx of funds at the beginning of this year, I will be forced to cut back on both federal and state legislative programs.
The fact is, with the tremendous opportunities you and I have in the current political climate, abandoning the field now would be heartbreaking.
With 11 million American workers shouldering Big Labor’s yoke, you and I cannot give up the fight now.
So can I count on you to chip in with a contribution NOW equal to or even larger than $10?
Thanks to the Committee’s 2014 Issue Education and Mobilization Program, you and I are now closer than ever to forcing votes on -- and ultimately passing -- a National Right to Work Law to free workers nationwide from the shackles of compulsory unionism.
That’s why I hope I can count on you to reach deep and make a contribution large enough for us to keep fighting in Congress and the state legislatures.
And why I hope you’ll consider chipping in with a generous contribution of $10, $20, or at least $30.
But whatever you can afford, please send it right away so I’ll know how to budget for the coming year.
Your advice and support are critical, so please submit your 2015 Membership Ballot as soon as possible. The Board of Directors and I anxiously await your reply.
Sincerely,
Mark Mix
President
P.S. Your completed 2015 Membership Ballot may be essential in a court battle to protect the rights of members like you.
I need to hear from 100% of our membership. Please act today.
Along with your ballot, please chip in with a generous contribution of $10, $20, or at least $30. Without your support right now, you and I may miss a real opportunity to take the fight directly to Big Labor.
So, please sign your Membership Ballot with your contribution today.
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