Cannabis Federal Tax Planning & Tax Audit Support

Despite IRS Code Section 280E disallowing deductions for illegal business expenses, certain marijuana businesses can reduce taxable income by deducting the cost of goods sold (COGS) under IRS Section 471(c). However, this tax strategy carries risks and is not entirely risk-free.

Allocating cost of goods sold for cannabis businesses is complex and requires careful tax planning. The IRS frequently scrutinizes these deductions and may disallow some or all of the claimed COGS, leading to potential tax liabilities and penalties.

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Tax Implication Analysis of Cost of Goods Sold Under Section 280E
Section 280E of the IRS Code disallows deductions or credits for expenses related to businesses trafficking in Schedule I or II controlled substances under federal law. However, cannabis businesses can reduce their gross receipts by properly calculating and deducting the cost of goods sold (COGS) to accurately determine gross income and lower federal tax liability.

Cannabis Entity Structuring and Tax Optimization
We assist marijuana businesses with optimizing legal entity structures to maximize tax benefits and ensure compliance. Whether you are a new cannabis business or an established operator, proper entity structuring is critical to navigate complex cannabis tax laws and minimize tax exposure.

IRS Audit Preparation and Representation for Cannabis Businesses
Cannabis companies face heightened IRS audit risks due to regulatory non-compliance and cash-intensive operations. We provide audit preparation and IRS representation services to help cannabis businesses mitigate tax audit risks and address enforcement actions effectively.

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Our attorney can assist with evaluating and optimizing your tax options.

Tax law is complex. Tax attorney ALENA MILES offers legal tax solutions

Cannabis Federal Tax Planning & Tax Audit Support

OUR SERVICES AND HOW WE CAN HELP

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