Dear NCIA friends:
As we embark upon 2018, Thorburn Walker continues to be at the forefront of cannabis tax defense. It was disappointing, but not unexpected, that Jeff Sessions would rescind the Cole and Ogden Memos. However, it was this possibility that kept us moving in aggressively defending IRS audits of cannabis clients.
Jeff Sessions is giving the green light to cannabis prosecution. Whether or not they will occur remains uncertain. Regardless, given the dual nature of IRS 280E audits, it is important to protect your rights. The cold, hard, truth of Section 280E is that it applies only to persons who are operating in violation of drug laws. In the IRS’s view of the statute, those who sell cannabis are violating federal criminal drug laws and, thus, Section 280E applies.
We believe that the IRS has been sharing audit information the Department of Justice. The IRS denies this is occurring. What we do know from our court cases, however, is that the IRS/DOJ is zealously defending their
ability to share audit information. Given that DOJ is one step closer to actual prosecutions, this potential for sharing becomes even mo...more