US: Internal Revenue Service releases tax guidance for the cannabis industry

The Internal Revenue Service (IRS) on Thursday released updated guidance on tax policy for the cannabis industry, including instructions on how cannabis businesses that don’t have access to bank accounts can pay their tax bills using large amounts of cash.

Because cannabis remains federally illegal, the industry is largely deprived of tax benefits extended to operators in other markets—but it still has an obligation to pay taxes and properly report transactions, IRS said.

“A key component in promoting the highest degree of voluntary compliance on the part of taxpayers is helping them understand and meet their tax responsibilities while also enforcing the law with integrity and fairness to all,” the new memo states. “Businesses that traffic cannabis in contravention of federal or state law are subject to the limitations” in IRS code.


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