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🚨 CANNABIS BUSINESS OWNERS: IS YOUR COGS REPORTING ACCURATE? THE IRS IS WATCHING. 🚨

The IRS just sent a strong reminder to cannabis companies: Section 280E still applies. This comes after Trulieve’s $113 million tax refund made headlines, sparking major discussions in the industry. But according to cannabis tax attorney Rachel Gillette, the refund may have stemmed from overly conservative accounting practices in the first place.

Why is Section 280E Such a Big Deal?

Since 1982, Section 280E has blocked cannabis businesses from deducting ordinary business expenses, thanks to a tax court case involving a convicted drug dealer. While it was intended to target illegal drug traffickers, it has continued to cripple legal cannabis businesses with excessive tax burdens.

The IRS Loves Auditing Cannabis Companies – Here’s Why

📌 Cannabis businesses face a higher risk of audits. The IRS profits more per hour auditing cannabis companies than most other businesses.

📌 Even compliant businesses can be targeted. Over 50% of cannabis audits resulted in no changes to tax returns, but that doesn’t stop the IRS from digging deep.

📌 Back taxes, penalties, and interest add up fast. If your COGS (Cost of Goods Sold) calculations are incorrect, you could owe massive fines and back taxes.

Are Your COGS Correct?

Why You Need a Cannabis Accountant

With strict IRS scrutiny and complex tax laws, accurate COGS reporting is crucial for cannabis business owners. But getting it right isn’t easy.

That’s where NumberNexSolutions comes in. We help

✅ Ensure IRS-Compliant COGS Reporting – Avoid errors that trigger audits and penalties.

✅ Optimize Tax Deductions – Legally maximize what you can deduct under Section 280E.

✅ Protect Against Costly Audits – Stay prepared with accurate records and audit-proof financials.

✅ Improve Cash Flow & Profitability – Identify cost-saving opportunities to reinvest in your business.

✅ Get CFO-Level Financial Guidance – Plan for growth with expert cannabis accounting support.

Don’t Let Tax Mistakes Drain Your Profits

If your current accountant isn’t helping you grow, optimize your tax strategy, or navigate 280E properly, it’s time to make a change.

📞 Book a discovery call with NumberNexSolutions today and ensure your cannabis business is financially strong, IRS-compliant, and set up for long-term success.

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