{"id":9,"date":"2021-01-21T07:20:40","date_gmt":"2021-01-21T07:20:40","guid":{"rendered":"https:\/\/cannabistaxattorney.us\/?page_id=9"},"modified":"2022-09-02T18:22:44","modified_gmt":"2022-09-02T18:22:44","slug":"9-2","status":"publish","type":"page","link":"https:\/\/cannabistaxattorney.us\/","title":{"rendered":"Cannabis Tax Lawyer"},"content":{"rendered":"\n
\"Jin<\/figure>
Jin Kim<\/strong><\/i>
Law Office of Jin Kim<\/strong><\/br>Free Consultation<\/strong>
(916) 299-9913<\/a><\/strong><\/div>\n\n\n\n

While many states have embraced the marijuana industry by legalizing medical and recreational marijuana, the Internal Revenue Service has aggressively pursued taxation of the cannabis industry.  From denying business deductions pursuant to IRC 280E to income tax audits, many cannabis businesses encounter tax disputes with the Internal Revenue Service.  To help marijuana businesses receive fair treatment from the IRS and CDTFA, cannabis tax attorney<\/a> Jin Kim represents clients facing an audit, assessment of tax, and back taxes.<\/p>\n\n\n\n

If your marijuana dispensary has incurred tax debt or been notified of an audit, call tax attorney<\/a> Jin Kim at (916) 299-9913<\/a><\/strong> for a free consultation.<\/p><\/blockquote>\n\n\n\n

Marijuana Business Law<\/h2>\n\n\n\n

The marijuana industry faces unique legal challenges stemming from the conflict between state and federal law. From opening a bank account<\/a> to payroll tax deposits, the operation of a cannabis business requires careful planning and regulatory compliance. Attorney Jin Kim helps marijuana businesses such as cultivators, producers, and retailers maintain regulatory compliance while protecting their business interests. <\/p>\n\n\n\n

About Jin Kim<\/h2>\n\n\n\n

Attorney Jin Kim has been defending clients from the Internal Revenue Service for over 10 years. In addition to her federal tax defense practice, she also represents California clients against the Franchise Tax Board, CDTFA, and local tax agencies. As more states legalized recreational marijuana, attorney Jin Kim<\/a> expanded her practice to the evolving area of cannabis taxation. As of 2021, she represents marijuana dispensaries and other cannabis businesses in federal and state tax controversies.<\/p>\n\n\n\n

Offer In Compromise<\/h2>\n\n\n\n

In some cases, an offer in compromise is the best way to resolve cannabis tax debt. The IRS won’t summarily reject an offer in compromise on public policy<\/a> grounds solely because the taxpayer is engaged in the sale of marijuana. However, such an offer must be calculated pursuant to Internal Revenue Manual 5.8.5.25.2<\/a> Calculation of Future Income \u2013 Cultivation and Sale of Marijuana in Accordance with State Laws<\/em>. Offers that challenge allowable expense calculations risk rejection on public policy grounds, so consult with an experienced cannabis tax lawyer before pursuing an offer in compromise.<\/p>\n\n\n\n

Tax Litigation & IRS Settlement<\/h2>\n\n\n\n

Attorney Jin Kim represents cannabis businesses with federal or state tax debt.  In many cases, disputes with the Internal Revenue Service can be resolved by settlement rather than litigation, thereby reducing legal fees for the client while providing a certain outcome. In many cases, practical solutions work better for clients than costly litigation.<\/p>\n\n\n\n

Cannabis Tax Challenges<\/h2>\n\n\n\n

Federal tax law is not kind to the cannabis industry.  Internal Revenue Code Section 280E<\/a> effectively prevents marijuana dispensaries from deducting business expenses which greatly increases their effective tax rate.  The harsh effect of IRC 280E coupled with the cash-based nature of the marijuana business (itself a product of federal banking regulations) has led the Internal Revenue Service to aggressively audit, review, and tax marijuana dispensaries.<\/p>\n\n\n\n

In particular, marijuana dispensaries must navigate challenges<\/a> related to paying taxes, deducting expenses, calculating cost of goods sold<\/a>, banking, paying payroll taxes without penalty, and avoiding audits from the IRS, state tax authorities, and regulatory agencies.<\/p>\n\n\n\n

Federal Laws <\/h2>\n\n\n\n

The unique tax challenges faced by the cannabis industry stems from the impact of federal laws pertaining to the sale of marijuana.  Particularly, the impact of IRC 280E, COGS case law, FINCEN<\/a>, and state tax laws pose unique challenges that often require representation from cannabis tax counsel. <\/p>\n\n\n\n

Tax attorney Jin Kim represents clients in the cannabis industry facing tax disputes with the Internal Revenue Service and state tax agencies. In California, she represents California clients against the FTB, EDD, and CDTFA<\/a>, but her practice extends to many states that have legalized the sale of marijuana.  To learn more about her practice and how she can help your federal or state tax matter, call her office at (916) 299-9913<\/a><\/strong>.<\/p>\n\n\n\n

Cannabis Tax Audits & Litigation<\/h2>\n\n\n\n

While the Department of Justice has been constrained from pursuing the cannabis industry, the Internal Revenue Service has aggressively pursued taxation of marijuana dispensaries by strictly applying 280E to deny deductions and adhering to Chief Counsel Advice 201504011<\/a> in determining costs of goods sold (COGS).  <\/p>\n\n\n\n

CDTFA Sales Tax Audits<\/h3>\n\n\n\n

In addition to the Internal Revenue Service, some marijuana dispensaries find themselves burdened by CDTFA sales tax and excise tax audits<\/a>.  Due to the necessity of operating in a cash-based environment with sales tax calculations unique to the cannabis industry, many cannabis businesses find themselves subject to audit from the CDTFA. However, these cannabis businesses can often benefit from experienced representation early<\/em> in the CDTFA audit process<\/a> and ease the burden of compliance. Whether your cannabis business received notice of a sales tax audit or has already been assessed additional tax liability with penalties, call CDTFA tax attorney Jin Kim for a free consultation to learn more about your tax resolution options.<\/p>\n\n\n\n

Substantiation<\/h2>\n\n\n\n

Many cannabis businesses involved in tax litigation with the Internal Revenue Service have lost their cases due to failed substantiation of expenses and cost of goods sold.  As tax courts have noted, a taxpayer must keep sufficient records to substantiate any amount claimed as COGS (Wright v Commissioner<\/em>).  Likewise, a taxpayer seeking to deduct business expenses for a separate business that does not traffick in marijuana must maintain sufficient records to substantiate the amounts of their income and entitlement to any deductions (INDOPCO, Inc v. Commissioner<\/em>).  Unfortunately for the cannabis industry, federal banking regulations have forced the industry to operate in cash, creating unique challenges to substantiating expenses and cost of goods sold.  Failure to substantiate expenses and COGS has left cannabis dispensaries with not only enhanced tax liability but also accuracy-related penalties.<\/p>\n\n\n\n

Tax Penalties<\/h2>\n\n\n\n

Many cannabis businesses attempt to comply with the complicated array of state and federal tax laws, only to find themselves facing tax penalties<\/a>.  These penalties can range from 20% federal accuracy-related penalties to a 50% California failure to pay penalty often applied to cannabis distributors.  However, effective representation from a marijuana tax attorney can result in the reduction or waiver of tax penalties.  For instance, a tax lawyer may be able to avoid 6662(a) accuracy-related penalties<\/a> by showing that your marijuana dispensary acted with reasonable cause and good faith, for example, by relying on professional tax advice and keeping good records to support deductions or COGS.<\/p>\n\n\n\n

Free Consultation<\/strong><\/p>\n\n\n\n

If your cannabis business has a tax dispute with the IRS or state taxing agency, call attorney Jin Kim at (916) 299-9913<\/a><\/strong> for a free consultation. As your tax attorney, she can work toward a practical solution for resolving your tax debt with the IRS, CDTFA, FTB, or EDD. Whether your business has payroll tax, employment tax, sales tax, or federal tax liability, tax attorney Jin Kim can help.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jin KimLaw Office of Jin KimFree Consultation(916) 299-9913 While many states have embraced the marijuana industry by legalizing medical and recreational marijuana, the Internal Revenue Service has aggressively pursued taxation of the cannabis industry.  From denying business deductions pursuant to IRC 280E to income tax audits, many cannabis businesses encounter tax disputes with the Internal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"featured_image_src":null,"featured_image_src_square":null,"_links":{"self":[{"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/pages\/9"}],"collection":[{"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/comments?post=9"}],"version-history":[{"count":35,"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/pages\/9\/revisions"}],"predecessor-version":[{"id":386,"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/pages\/9\/revisions\/386"}],"wp:attachment":[{"href":"https:\/\/cannabistaxattorney.us\/wp-json\/wp\/v2\/media?parent=9"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}