aBIZinaBOX IRC Sec. 280E - Trafficking Expenses Analysis
aBIZinaBOX has developed a methodology for analyzing, classifying and presenting IRC Sec. 280E expenses to minimize IRS disallowence and exposure
aBIZinaBOX has developed a methodology for analyzing, classifying and presenting IRC Sec. 280E expenses to minimize IRS disallowance and exposure. The methodology involves a review of an entities expenses utilizing the legislative and judicial background to IRC Sec. 280E - Trafficking expenses. Then we broadly apply IRS regulations, and the principles embody in IRC Chief Counsel Memorandum 201504011 to categorize, combine and present the information in a tax return with a view towards minimizing the expenses subject to disallowance in a prudent and defensible way. The goal is reduced exposure, reduced chance of examination, and the most efficient examination if the return is selected.
The Cannabis Practice Group ["CPG"] of aBIZinaBOX Inc. CPA's serves commercial cannabis industry businesses in California. The CPG have experienced > 250% growth over prior period due adult-use cannabis becoming legal in 2018. The CPG has professionals in Evanston, IL, and Oakland, CA. The practice is led by Jordan S. Zoot, CPA, Managing Director – CEO, who has been in professional practice since 1982. Mr. Zoot is licensed as a CPA in CA, FL, IL, NY, and TX. He has a national reputation of technical and transactional taxation of pass-thru entities [Partnerships, LLC's and S Corporations], private equity and alternative asset funds primarily in distressed mortgages and assets, professional services, real estate, venture-funded tech start-ups, and the commercial cannabis industry in California. Mr. Zoot has extensive experience in taxpayer and practitioner representation with the Examination, Appeals and Collection functions with IRS, including Special Procedures – Bankruptcy, Insolvency, Offer in Compromise, and Circular 230 Practitioner Representation with the Office of Professional Responsibility ["OPR"] Mr. Zoot has a member of the AICPA, and state societies [CalCPA, FICPA, ICPAS, NYSSCPA, and TSCPA] for over thirty years. He has served an appointed member of AICPA's Responsibilities in Tax Practice, Practice Management, and Subchapter K Technical Committees and as the CITP Champion for Illinois. He has had extensive involvement in the regulation commenting process with the US Treasury. Mr. Zoot is engaged at numerous points of contact in a lead role with AICPA senior executives in the process of developing policy, advocacy and education for CPA's serving the legal cannabis industry. He has been involved with OPR in connection with the cannabis industry, Title 31 [FinCEN] matters and the IRS's OVDP Amnesty Program. Mr. Zoot is engaged with CalCPA's Government Liaison Office in connection with SWOT analysis, talking points for engagement with the legislature, the cannabis regulatory agencies, Bureau of Cannabis Control “BCC” [Retail, Retail-Delivery, Distribution – Packaging], California Dept. of Public Health “CDPH” [Manufacturing, Processing, Extraction], California Dept. of Food and Agriculture “CDFA” [Cultivation] and the California Dept. of Tax and Fee Administration ["CDTFA"] in connection with urgently need regulatory guidance for Cannabis Cultivation, Excise and Sales Taxes. The firm is skilled in dealing with: • The unique financial record-keeping needs of cultivators, distributors, processors, and extractors. • The selection of optimal operating structures for each participant in the California cannabis industry. • Adjusting structures and modifying financial record-keeping to comply with a rapidly evolving regulated California marketplace. • Understanding of the challenges presented by a long history in this industry of “doing business in cash” and the associated problems. • The practical needs related to banking, card processing, and anti-money laundering issues applicable to this industry. • The complex processes relating to permitting, licensing as well as reporting and paying cannabis excise tax and gross receipts tax at the municipal and county level. • Implementing effective strategies for addressing the onerous impact of the limitation on the deduction of ordinary and necessary business expenses imposed by Internal Revenue Code §280E on businesses engaged in “trafficking”. A Leader in California’s Cannabis Practice, the CPG will retain its position as a leader in financial record-keeping and be reporting for California’s medical and recreational cannabis industry by constantly adjusting to the demands of this evolving industry. The CPG moderates a California Cannabis Regulation subreddit at https://www.reddit.com/r/cacannabisregulation/