As many of you know who follow my tax musings via this blog, I recently led a team of people that shepherded a Marijuana Dispensary through the IRS Examination and Appeals functions. The dispensary in question was owned and operated by a taxpayer who in all regards was a good, honest, hard working, caring person that kept detailed records accounting for every penny.
By engaging a taxpayer with this profile up front I was able to challenge the nuanced understanding of IRC §280E – Expenditures in Connection with the Illegal Sale of Drugs, §263A – Capitalization & Inclusion of Inventory Costs of Certain Expenses & §471 – General Rules for Inventories inside the IRS without having to get bogged down with the drama of the taxpayer’s character and efficacy of intent as in the Olive Tax Court Case. Read More
If you have been impacted by a disaster in your area like many of my friends most recently here in Colorado due to flooding as defined by 
Unless you elect different treatment, for shareholder income tax purposes S corporation distributions are applied in the following order:
A taxpayer came to me looking for a second opinion on how his company’s 2011 and 2012 IRS Form 1120-S were prepared, signed and filed because the retained earnings reported on Schedule L was ($100,000) – as in negative – AND the Accumulated Adjustment Account (AAA) on Schedule M-2 was also reported at ($100,000) as well.
If you have ever been a victim of IRS lien or levy action you know first hand that it can be unilaterally devastating on many levels and take literally years if not decades to financially overcome. To add insult to injury it gets all the more complicated when the IRS action is taken before you have had the opportunity to exercise your legal appeal rights. The only thing worse in my opinion is when the action is incorrectly taken without proper authority or basis AND the appeal effort is mishandled to boot. For the record this happens quite frequently for a wide variety of reasons.
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