Section 280E tax cases introduce complications, and the IRS may not always see your deductions as valid. Once the IRS assesses your taxes and the balance goes unpaid, you can’t keep appealing or negotiating without keeping the looming balance over your business in mind. The IRS is trying to collect a debt it believes is already fixed, and failing to put a plan in place can lead to more penalties and future risk.
280E assessments are often large enough to threaten day-to-day operations. Contact Mike at Highland Tax Group to get into compliance, set up a payment plan, or negotiate with the IRS to avoid unpleasant collection efforts.
What Can Happen After a 280E Assessment?
The IRS won’t come knocking down your door if you fail to pay your taxes. Once your tax bill goes unpaid, the IRS has several collection tools, including:
- Federal Tax Lien: A federal tax lien means that the federal government takes a legal claim against your property after you fail to pay a tax debt. You may be attempting to coordinate with the IRS to fix 280E accounting, but the tax bill usually remains and could result in a lien.
- Levy: The IRS can levy your property to settle a tax debt. Before most levies, the IRS must issue a Final Notice of Intent to Levy and provide at least 30 days to request a hearing. Highland Tax Group can negotiate with the IRS to reach an agreement, even if you’re facing a Final Notice.
- Summons: The IRS can issue a summons if it needs to gather more information or testimony about your business, mandating that you meet with an IRS officer.
If your marijuana or cannabis business is operating on razor-thin margins due to Section 280E, any assessment leading to a higher-than-expected tax bill may suddenly place you at risk of IRS collections. Highland Tax Group can work with the IRS and help you pursue a collection solution before liens or levies damage your day-to-day operations. Contact a team member today.