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Tax,
9th U.S. Circuit Court of Appeals

Apr. 30, 2021

Settle or fight? The challenges of Section 280E and cannabis

State-licensed marijuana businesses have high IRS audit rates and face big challenges to minimize their federal tax burden. One of the biggest barriers to profitability for a state-legal marijuana company is taxes.

State-licensed marijuana businesses have high IRS audit rates and face big challenges to minimize their federal tax burden. One of the biggest barriers to profitability for a state-legal marijuana company is taxes. Without a doubt, the biggest fly in the ointment is Internal Revenue Code Section 280E, a provision included among many IRC sections that disallow expenses for policy reasons. Most IRC provisions that disallow business expenses deny narrow, even if material...

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