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Tag: Tax Audit

Marijuana Dispensary Audits And Your Fifth Amendment Rights

marijuana audits

[et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_position=”top_left” background_repeat=”repeat” background_size=”initial” _builder_version=”3.0.100″ background_layout=”light”] Can A Dispensary Claim Immunity to Avoid Future Criminal Prosecution? A Colorado medical marijuana company has refused to turn over documents to the IRS, citing fears that the records could be used against the company in a criminal proceeding. Standing Akimbo’s lawyer has… Read more »

Evaluating The Evidence In An IRS Audit

How Do Auditors Decide What’s Next? After the background check, personal interview, document review, and other cash business audit steps, there is usually a significant discrepancy between the taxpayer’s declarations about business income and the auditor’s views on this subject. These discrepancies are especially common in marijuana dispensaries. These businesses, and their employees, are so… Read more »

How Does The IRS Choose Which Cash Businesses To Audit?

Examining the Cash Business Audit Profile Profiles can be good or bad. They can be the “must love dogs” type or the “potential serial killer” ilk. IRS cash business profiles lean more towards the latter, and the Service doesn’t need much evidence to launch a full review. As mentioned in a previous post, marijuana dispensaries and… Read more »

Key IRS Cash Business Audit Techniques

Marijuana dispensary cash briefcase

IRS Methods for Reconstructing Cash Income in a Tax Audit After the Service has targeted a cash business for audit, laid a foundation, examined applicable records, and interviewed the taxpayer, the nitty gritty begins. The auditor will indirectly reconstruct business income if the records are inadequate, inconsistent with the interview answers, or otherwise suspect.

How the IRS Audits Income for Cash Businesses

Cash Business Audit

The IRS Has Several Methods for Figuring Out Cash Income When treasury agents get the scent of unreported income in their nostrils, they always use a variation of the good cop-bad cop routine. Sometimes before they even drop the A-word, auditors begin asking seemingly friendly questions about perceived income discrepancies. If they do not get… Read more »

What is an FET Audit?

Overview of IRS FET Tax Audits Shortly after Tax Day 2016, IRS Commissioner John Koskinen remarked that, after five years of budget cuts and four years of hiring freezes, the agency would “do less with less.” The pronouncement is a mixed bag for those who must pay the federal excise tax on large trucks. While the agency… Read more »

Lawyers Beware: The IRS Is Trained in How to Conduct Attorney Audits

The IRS trains its agents in detail in how to conduct attorney audits. If you are an attorney facing a tax audit, take nothing for granted. The IRS won’t. Some years ago, they even had a program called Project Esquire to prosecute members of the bar. Here is a brief snapshot of what to expect…. Read more »

Most Common Ways to Prevent an IRS Tax Audit

Best Ways to Avoid an IRS Audit We recently published a blog wherein we cleared up some commonly held misconceptions regarding IRS audits. Here we are going to lay out some general rules of thumb and tips you can follow to help you avoid being audited by the IRS. Before you begin to panic you… Read more »

Tax Audit Myths Debunked

If we say the word “tax audit” or “IRS auditor” what is the first thing that comes to mind? Our guess is that due to a number of different factors and commonly held misconceptions most laypersons conjure up a variety of images and “facts,” none of which resemble anything close to an iota of truth…. Read more »

Marijuana Business Tax Audits

Special Considerations for IRS Audits of Marijuana-Related Businesses Marijuana dispensary businesses are six times more likely to be audited by the IRS than U.S. businesses in general. These small businesses get hauled before tax examiners at the same rate as corporations that have assets in excess of $100 million. Worse, the outcomes of IRS audits… Read more »