The IRS recently created a short list of FAQs and a few days later launched a marijuana industry informational webpage. The new resources contain basic information such as the application of general taxpayer requirements to the cannabis industry and the deduction denial of section 280E…
Travis W. Thompson of Sideman & Bancroft LLP agreed with the connection between the new IRS guidance as an attempt to boost compliance and marijuana taxpayers’ interest in legitimizing their businesses. Following the agency’s guidance allows companies to create circumstantial evidence that they take compliance seriously, he said.
Thompson said the FAQ does a good job of laying out the IRS’s position on things like the basics of compliance and the effect of section 280E. The IRS framed the discussion in an easy-to-read format, he said. However, the FAQ wasn’t complete because some section 280E issues are still being litigated and that fact wasn’t mentioned, Thompson said.