420 with CNW — IRS Terminology Every Cannabis En
Post# of 57
(Total Views: 146)
Posted On: 04/20/2021 5:18:27 PM
420 with CNW — IRS Terminology Every Cannabis Entrepreneur Should Know
The Internal Revenue Service (“IRS”) is a United States government agency that is responsible for collecting taxes and enforcing tax laws contained in the Internal Revenue Code. Below are a few terminologies that the agency uses — and which every cannabis business needs to know.
Tax Deficiency
This is basically the difference between what the IRS has determined is owed to the federal government based off of its records and what a taxpayer reports on their return.
The Audit Technique Guide/Participant Guide
These guides are internally written and published by the IRS and are used to assist agents in auditing businesses. While the Audit Technique Guide is made public for companies and can be used by businesses to help in paying federal taxes, the Participant Guide remains confidential and was published for IRS use only.
The Authorization Form
This form is used by agents of the IRS to request targeted audit programs, commonly referred to as a Compliance Initiative Project. The form, which includes a description of the audit, its scope and its objectives, must be completed by agents and signed by their superiors.
Compliance Initiative Project (“CIP”)
As mentioned above, this is the formal title for a targeted series of audits for noncompliant industries and taxpayer groups. The objective of the targeted audit programs are to find returns when the agency suspects that taxpayers have underpaid their federal taxes.
Since 2010, the Internal Revenue Service has launched at least five CIPs targeting cannabis companies.
The Internal Revenue Code’s Section 280E: This prevents any company that is engaged in the trafficking of Schedule 1 or 2 controlled substances from obtaining standard business deductions on their federal taxes. As a result of this section, licensed cannabis businesses pay higher taxes when compared to businesses in other industries.
CHAMP: Refers to a major legal case that focuses on section 280E and its application to state-legal cannabis businesses. The case, “Californians Helping to Alleviate Medical Problems vs. Commissioner,” was closed in 2007 after a ruling was issued, which found that the plaintiff’s caregiving service was separate from the dispensary.
Olive: This is the shorthand reference for another section 280E legal case, which was decided in 2012. The case, “Olive vs. Commissioner and CHAMP,” along with CHAMPS, are considered to be important legal precedents for how the IRS applies Section 280E of the internal revenue code to cannabis businesses.
Freedom of Information Act (“FOIA”): This federal law was enacted to ensure government transparency,in 1967. It is commonly referred to using its abbreviation forma: FOIA. The FOIA allows United States citizens to ask for documents from any government agency.
Many U.S.-based cannabis companies may be wondering when changes will be made to the federal laws governing marijuana so that they can enjoy equal treatment by tax authorities in the way companies in Canada, such as Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF), are regarded where cannabis is legal across the country.
NOTE TO INVESTORS: The latest news and updates relating to Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF) are available in the company’s newsroom at https://cnw.fm/PULL
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW420, wherever published or re-published: http://CNW.fm/Disclaimer
The Internal Revenue Service (“IRS”) is a United States government agency that is responsible for collecting taxes and enforcing tax laws contained in the Internal Revenue Code. Below are a few terminologies that the agency uses — and which every cannabis business needs to know.
Tax Deficiency
This is basically the difference between what the IRS has determined is owed to the federal government based off of its records and what a taxpayer reports on their return.
The Audit Technique Guide/Participant Guide
These guides are internally written and published by the IRS and are used to assist agents in auditing businesses. While the Audit Technique Guide is made public for companies and can be used by businesses to help in paying federal taxes, the Participant Guide remains confidential and was published for IRS use only.
The Authorization Form
This form is used by agents of the IRS to request targeted audit programs, commonly referred to as a Compliance Initiative Project. The form, which includes a description of the audit, its scope and its objectives, must be completed by agents and signed by their superiors.
Compliance Initiative Project (“CIP”)
As mentioned above, this is the formal title for a targeted series of audits for noncompliant industries and taxpayer groups. The objective of the targeted audit programs are to find returns when the agency suspects that taxpayers have underpaid their federal taxes.
Since 2010, the Internal Revenue Service has launched at least five CIPs targeting cannabis companies.
The Internal Revenue Code’s Section 280E: This prevents any company that is engaged in the trafficking of Schedule 1 or 2 controlled substances from obtaining standard business deductions on their federal taxes. As a result of this section, licensed cannabis businesses pay higher taxes when compared to businesses in other industries.
CHAMP: Refers to a major legal case that focuses on section 280E and its application to state-legal cannabis businesses. The case, “Californians Helping to Alleviate Medical Problems vs. Commissioner,” was closed in 2007 after a ruling was issued, which found that the plaintiff’s caregiving service was separate from the dispensary.
Olive: This is the shorthand reference for another section 280E legal case, which was decided in 2012. The case, “Olive vs. Commissioner and CHAMP,” along with CHAMPS, are considered to be important legal precedents for how the IRS applies Section 280E of the internal revenue code to cannabis businesses.
Freedom of Information Act (“FOIA”): This federal law was enacted to ensure government transparency,in 1967. It is commonly referred to using its abbreviation forma: FOIA. The FOIA allows United States citizens to ask for documents from any government agency.
Many U.S.-based cannabis companies may be wondering when changes will be made to the federal laws governing marijuana so that they can enjoy equal treatment by tax authorities in the way companies in Canada, such as Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF), are regarded where cannabis is legal across the country.
NOTE TO INVESTORS: The latest news and updates relating to Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF) are available in the company’s newsroom at https://cnw.fm/PULL
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW420, wherever published or re-published: http://CNW.fm/Disclaimer
(0)
(0)Pure Extracts Technologies Corp. (PRXTF) Stock Research Links
Scroll down for more posts ▼