IRS Marijuana & Cannabis Tax Audit Defense

Service Overview

The 280E Problem That Defines Cannabis Audits

Cannabis is legal in California but remains federally controlled, and that collision drives everything. Under IRC § 280E, a business trafficking in a Schedule I substance cannot deduct ordinary business expenses — no rent, marketing, or most wages. The one lawful offset is cost of goods sold (COGS), so a cannabis audit is almost always a fight over COGS versus disallowed operating expenses.

Experienced

Experienced tax professionals and enrolled representation

Exclusive

Full compliance with IRS and state tax regulations

Comprehesive

Case‑specific strategies, not one‑size‑fits‑all solutions

Service Benefits

What the IRS Targets

COGS allocations — the line between capitalizable inventory costs and disallowed operating expenses.
Entity structuring between plant-touching and non-trafficking businesses.
Cash handling, since cannabis is cash-heavy and gross receipts draw scrutiny.
Inventory and § 471 accounting methods.

Experienced Tax Representation

Your case is handled by knowledgeable professionals who understand IRS procedures, state regulations, and negotiation frameworks, ensuring accurate and compliant representation from start to finish.

Strategic Risk Reduction

We implement structured processes to minimize penalties, enforcement actions, and procedural errors while maintaining full regulatory compliance.

Compliance‑Driven Solutions

Every strategy is built in alignment with current federal and state tax laws to ensure defensibility, transparency, and long‑term stability.

Case‑Specific Strategy

No two tax situations are the same. Our approach is tailored to your specific financial circumstances, filing history, and exposure level.

End‑to‑End Case Management

From initial evaluation through final resolution, we manage documentation, communication, and procedural steps with precision and accountability.

Long‑Term Financial Stability

Beyond resolution, we provide guidance aimed at preventing future tax issues and helping you maintain ongoing compliance.

How Its Work

How We Defend a Cannabis Audit

We build the defense around a properly supported COGS computation and the accounting methods the law allows, then represent your business before the examiner under a Power of Attorney and push back where an examiner overreaches beyond what 280E requires.

280E is unforgiving by design and no one can promise a particular outcome — what we do is make sure your return claims everything the law does permit.

01.

First Initial Consultation

We begin with a detailed evaluation of your tax situation, documents, and exposure to determine the most effective strategy.

02.

Needs Assessment Proccess

A customized action plan is prepared in accordance with IRS or state guidelines, ensuring accuracy and full compliance.

03.

Proposal and Agreement

We handle communications, filings, and negotiations while keeping you informed at every stage.

04.

Implementation and Execution

Once resolved, we provide guidance to help you maintain compliance and avoid recurring issues.

Find our mailing address and office location for any postal correspondence

Head Office Address

Email Address

Telephone

IRS Marijuana (Cannabis) Tax Audit

Get Your Free Tax Consultation