Mary Jane Business Issues

 

  Someone once said that what this country needs is a good five cent cigar. Maybe things would feel better if that cigar was filled with marijuana. But no matter, the marijuana industry is still at odds with the tax system. Even in those states who have seen the “light” and made recreational use of marijuana a viable alternative to watching the nightly news, federal laws still make such activity subject to special tax rules. For those businesses, like dispensaries, they are only permitted to deduct from their revenue the cost of goods sold. All of the other delicious deductions available to businesses are denied. This would seem like some type of unconstitutional discrimination, but with the recent appointment of Justice Barrett, who it appears neither smokes, drinks or has any bad habits and is in line for sainthood one day, any change seems to have gone up in smoke.

IRS Security Ideas

 

The IRS is trying to stay on top of security issues especially as more people holiday shop online as well as work from home. It says that this is the start of the “hunting season” for online thieves. According to the agency these are the steps that everyone should be taking to protect themselves:

• Don't forget to use security software for computers and mobile phones – and keep it updated.
• Make sure purchased anti-virus software has a feature to stop malware, and there is a firewall that can prevent intrusions.
• Phishing scams – like imposter emails, calls and texts -- are the No. 1 way thieves steal personal data. Don't open links or attachments on suspicious emails. This year, fraud scams related to COVID-19 and the Economic Impact Payment are common.
• Use strong and unique passwords for online accounts. Use a phrase or series of words that can be easily remembered or use a password manager.
• Use multi-factor authentication whenever possible. Many email providers and social media sites offer this feature. It helps prevents thieves from easily hacking accounts.
• Shop at sites where the web address begins with "https" – the "s" is for secure communications over the computer network. Also, look for the “padlock” icon in the browser window.
• Don't shop on unsecured public Wi-Fi in places like a mall. Remember, thieves can eavesdrop.
• At home, secure home Wi-Fis with a password. With more homes connected to the web, secured systems become more important, from wireless printers, wireless door locks to wireless thermometers. These can be access points for identity thieves.
• Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones – providing an important place to recover financial or tax data.

The IRS Pot Page

 

In my last bulletin I mentioned the plight of marijuana business owners unable to deduct their ordinary and necessary business expenses with the exception of cost of goods sold. A bill in the House has been delayed which would have decriminalized marijuana. So even in states where it is legal to buy and Puff the Magic Dragon these deductions are not allowed. And it gets worse. IRS agents are focusing on weed dispensaries for examination looking to disallow write-offs that are claimed. So far, courts have sided with the IRS until congressional action is taken. But who would’ve ever thought that the IRS would have a “pot page” on its website which includes a short list of FAQs! I can just imagine a bunch of 60s hippies sitting around sharing their iPads while puffing and perusing the pot page. Man, it is a brave new world.