IRS examinations of cannabis businesses
When the IRS examines a plant-touching business, the central question is almost always whether the cost of goods sold claimed on the return is properly documented and calculated under Section 280E and the applicable Treasury regulations. We respond to information document requests, prepare the cost accounting workpapers an examiner needs to see, and represent you directly as your authorized power-of-attorney representative through the exam.
MED compliance checks and inspections
Marijuana Enforcement Division compliance checks focus on inventory tracking, METRC accuracy, security protocols and adherence to the Retail Marijuana Code or Medical Marijuana Code rather than tax deductions. We help prepare your team and your records before a scheduled or surprise inspection, and we reconcile your METRC data against your financial books beforehand so nothing in your inventory record contradicts what's on your books.
Responding to notices before they become full examinations
Many audit situations start as a simple notice or a request for clarification. We review notices from the IRS or the Colorado Department of Revenue immediately, determine whether a full response requires additional documentation, and manage the correspondence so a manageable inquiry doesn't escalate into a full-scope examination through delay or incomplete responses.
MED compliance checks versus IRS examinations
A Marijuana Enforcement Division compliance check and an IRS Section 280E examination test entirely different things — inventory control and seed-to-sale accuracy for MED, cost allocation and deduction support for the IRS. We prepare you differently for each and can represent you directly in front of the IRS as your authorized representative.
