The head of the Internal Revenue Service (IRS) says marijuana industry banking access would make the agency\u2019s job easier, and officials \u201cshouldn\u2019t just sit on our hands\u201d as the federal government moves to reschedule cannabis.<\/p>\n
At a hearing before the House Appropriations Subcommittee on Financial Services and General Government on Tuesday, Chairman Dave Joyce (R-OH) pressed IRS Commissioner Daniel Werfel about cannabis banking and tax compliance issues.<\/p>\n
The commissioner said the Justice Department\u2019s decision to move marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) is \u201crecent,\u201d and \u201cwhat we need to do in a moment like this is understand the implications that this change will have on a whole variety of different elements of this part of the economy.\u201d<\/p>\n
\u201cWhat will their status be with respect to financial institutions? Will they remain mostly a cash-based industry or would they move into something other than cash?\u201d Werfel said. \u201cAll of these things are important moving pieces for the IRS to determine how this emerging and changing industry is assessed at the right level and paying what they owe.\u201d<\/p>\n
\u201cWe shouldn\u2019t just sit on our hands,\u201d he added. \u201cWe should be active and looking at what steps we need to take\u2014and we need to interact with this community and make sure we understand and talk to them.\u201d<\/p>\n
The IRS commissioner also said that, in his experience, industries are generally \u201cvery amenable\u201d to getting clarifications on their tax expectations, and the cannabis industry is no different.<\/p>\n
\u201cIt\u2019s not a good thing if you\u2019re operating in ambiguity. It\u2019s a stressful enough situation to pay your taxes,\u201d he said, committing to working with the congressman \u201cto understand how this change evolves the industry and make sure we set up the right tax structure for them to operate in.\u201d<\/p>\n
\nJoyce, who serves as co-chair of the Congressional Cannabis Caucus, also asked if freeing up access to the banking system for marijuana businesses, as would be accomplished under a bipartisan bill he\u2019s sponsoring, would \u201cmake life a little bit easier for you.\u201d<\/p>\n
Werfel responded that \u201chistory has demonstrated\u201d that when businesses are effectively integrated with the banking system, that \u201cdrives a lot of integrity and quality control,\u201d while reducing \u201cuncertainties and variables\u201d in a way that \u201coften is helpful to the taxpayer\u201d as well as to the federal government.<\/p>\n
\u201cSo, in general, yes\u201d marijuana banking access would make the IRS\u2019s job easier, he said.<\/p>\n
Finally, Joyce asked the commissioner whether the agency has taken any steps to provide resources to the cannabis industry so they\u2019re better informed about tax compliance and related issues.<\/p>\n
\u201cTypically what happens when we have an issue like this or an emerging change in an industry\u2014for example, new currencies, new new tax credits\u2026we build a collaboration and engagement,\u201d he said. \u201cSometimes we can do FAQs. Sometimes we can hold webinars or roundtables. It seems like this is a material change, and that\u2019s going to impact this industry and likely will warrant that we start building that type of stakeholder engagement.\u201d<\/p>\n
What didn\u2019t get explicitly mentioned at the hearing<\/a> was the fact that the administration\u2019s proposed rescheduling action would affect one critical IRS policy that\u2019s beleaguered the state-legal marijuana industry: a statute known as 280E that prevents licensed cannabis businesses from taking federal tax deductions. IRS\u00a0clarified that policy for medical cannabis firms in 2022<\/a>.<\/p>\n If marijuana is moved to Schedule III, that would enable such businesses to start taking those deductions, significantly reducing their effective tax rate.<\/p>\n The head of the Drug Enforcement Administration (DEA) that made the rescheduling decision also spoke to a separate Appropriations subcommittee on Tuesday, but she repeatedly declined to comment because the regulatory review process is \u201congoing.\u201d<\/a><\/p>\n With respect to cannabis banking legislation, the Senate Banking Committee approved the Secure and Fair Enforcement Regulation (SAFER) Banking Act last September and it\u2019s currently pending floor action. However, it\u2019s unclear what vehicle leadership will seek to use to advance it, as plans have reportedly fallen apart to attach it to a must-pass Federal Aviation Administration (FAA) reauthorization bill<\/a>.<\/p>\n Meanwhile, IRS issued a recent memo clarifying the rules for reporting large cash payments between marijuana businesses<\/a>, which the agency says should not automatically be considered \u201csuspicious\u201d just because of the federally prohibited nature of the industry.<\/p>\n FDA Expert Committee Will Review MDMA-Assisted Therapy For PTSD Next Month<\/a><\/p>\n<\/blockquote>\n\n The post Passing Marijuana Banking Bill Would Increase \u2018Integrity And Quality Control\u2019 In Financial System, IRS Commissioner Says<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
The head of the Internal Revenue Service (IRS) says marijuana industry banking access would make the agency\u2019s job easier, and officials \u201cshouldn\u2019t just sit on our hands\u201d as the federal government moves to reschedule cannabis. At a hearing before the House Appropriations Subcommittee on Financial Services and General Government onContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":458,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[81,126],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/75045"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/458"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=75045"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/75045\/revisions"}],"predecessor-version":[{"id":75046,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/75045\/revisions\/75046"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=75045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=75045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=75045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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\nRead More: Passing Marijuana Banking Bill Would Increase \u2018Integrity And Quality Control\u2019 In Financial System, IRS Commissioner Says<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"