Federal, state and local tax compliance
When you face an effective tax rate that is more than double the standard, as well as a high risk of being audited, you need to ensure that you are in full compliance with all of your federal, state and local tax obligations. Our accountants and tax preparers work diligently to help our firm’s marijuana business clients organize and manage their businesses to withstand intensive government scrutiny.
Resolution of documentation problems
All businesses need to keep track of their income, expenses and inventory for tax and reporting purposes. However, since marijuana businesses are more likely to be audited, their owners need to be extra vigilant about documenting the source and movement of their funds. The accumulation of cash hoards due to limited or no access to the banking system also creates a multitude of management and accounting problems.
Our highly detail-oriented tax attorneys and accountants will prepare and file your incorporation, licensing and tax paperwork in a proper and timely manner. We can help you set up an impeccable bookkeeping system, fix any documentation and payroll problems you may have, and ensure that all of your business tax files are in order. We also highly recommend setting up ongoing legal compliance, accounting and inventory self-assessments, which will help you keep your records in order and simplify any future audit of your business.
Tax Consulting and Strategies
U.S. taxpayers are taxed on all their income, even income derived from illegal sources, and marijuana businesses are no exception. However, by trafficking in a controlled substance within the meaning of Schedule I of the Controlled Substances Act, under 26 U.S. Code Section 280E cannabusinesses are disallowed from taking tax deductions and credits that are available to other businesses. Section 280E workarounds, such as reclassifying certain ordinary deductions as inventory and deducting them as Cost of Goods Sold, can provide tax savings but they by no means level the playing field.
Cannabusinesses benefit most from working with a tax team that advises them on an ongoing basis on how to find the most advantageous tax strategies available within the bounds of the law.
Guidance and remedies for noncompliant taxpayers
We pride ourselves on our ability to help taxpayers come into compliance with the tax law even if the government is already investigating them, and this comprises a significant amount of the work we do. We handle corrected and delinquent tax filings, and have been very successful in negotiating reduced penalties with the IRS, Franchise Tax Board (FTB), Employment Development Department (EDD), Board of Equalization (BOE), and local government tax authorities.
Keep in mind that bankruptcy is not available to marijuana businesses – tax and other debts will remain with your business and possibly with you personally. Whether you inadvertently violated the tax law or for any other reason are noncompliant, we have hands-on experience in helping our firm’s clients rectify their past mistakes at the lowest possible cost – and move their business forward efficiently and productively.
Full service tax accounting and law firm in San Francisco
In a complex, evolving industry that operates in conflict with federal law, marijuana-related businesses will eventually find themselves in legal difficulties and financial trouble unless they utilize the services of top-notch lawyers and tax advisors. Take advantage of our expertise and commitment to the shaping of a legitimate and thriving cannabis industry. You can reach our Cannabis Practice Group at 415 394-7200.
Disclaimer: Growing, cultivating and distributing marijuana are violations of federal law under the Controlled Substances Act, Title 21, Section 841(a)(1). The tax firm of Moskowitz, LLP can assist you in adhering to state and local law and regulations, and advise you how to conduct your operations in a way that will minimize your risk of federal prosecution. However, we do not intend for our advice to assist you in the violation of any law and in light of the evolving nature of the marijuana industry in the U.S., clients must understand that our legal and tax services can guarantee neither success nor immunity from civil and/or criminal prosecution. In all areas where the legal landscape is constantly changing, we recommend that our clients act with caution, stay abreast of developments in the industry, and consult with us often.