The IRS is now recognizing that the cannabis industry exists and should provide some guidance to the taxpayers. Their ‘gift’ is a section of the IRS.gov website specifically dedicated to cannabis. By the way, when looking for references, “marijuana” may be a better search word.

There are several ways to access information. Under “Industries/Professions Tax Centers,” “Marijuana Industry” is listed. Other industries listed include Indoor Tanning Services, Real Estate, Fishing, Gig, and Automotive, among others. That is real progress for a Schedule I drug to be listed on the top fifteen list of industries on the IRS website. In closer review, it is the only industry listed that is federally illegal.

Another route to get to the “Marijuana Industry” (not Cannabis) page is to go to IRS.gov, then search for “marijuana.” This brings up a whole list of marijuana stuff. At the top will be “Marijuana Industry.” Below that is a list of more than one hundred references to court cases and criminal investigations, some quasi-related to the marijuana industry.

Moving on to the Marijuana Industry page, it highlights the key issues of the IRS:

  • 280E
  • Income reporting
  • Cash payments
  • Large cash amounts
  • Estimated payments
  • Record keeping

Below the main headers are fifteen bullet points providing detailed references to the above, such as Form 8300 which is used to report cash payments over $10,000.

The first bullet is “marijuana Industry FAQs.” This list grows as time passes. There are some good, detailed references to read, for example, “What if I cannot fully pay?”.

If you do a Google Search on “irs marijuana” as well as several other derivations, you will hit an article published on September 27, 2021, by De Lon Harris, the Commissioner of the Small Business/Self Employed Examination branch of the IRS titled “Providing Resources to Help Cannabis Business Owners Successfully Navigate Unique Tax Responsibilities.” It is a lengthy article with the IRS’ position on the industry and how the IRS will deal with it.

In the bio about the author, you will see Commissioner Harris’ sphere of influence. His group oversees 57 million small and self-employed businesses with assets of under $10 million. They cover the majority of marijuana businesses.

The IRS has an ongoing educational outreach program. They have been a part of several webinars during the past year including the Annual Cannabis Symposium put on by the California Society of CPAs in August. This was an all-day teleconference in which Scott Irick, Director of the Examination in the SB/SE Division, was a panelist.

I was a panelist for the National Association of Cannabis Accounting and Tax Professionals in March. The other panelists were De Lon Harris; Scott Irick, Director, Examination in the SB/SE Division; and Naomi Granger, founder of the National Association of Cannabis Accounting and Tax Professionals. This was an in-depth discussion of taxation and examination activities associated with the cannabis industry. Among a variety of topics, both 280E and 471(c) were discussed at length.

So in the spirit of this holiday season, take some time to tap into this gift from the IRS. It will be worth your while.