The Internal Revenue Service has stated that it will refund a Denver medical marijuana dispensary that paid its taxes in cash.
The IRS had fined the dispensary, Allgreens, for paying its taxes in cash after rejecting the dispensary’s claim that its inability to access banking services forced it to do so. The IRS requires companies to pay its employee retention taxes electronically or pay a ten percent fine, except in certain cases.
In response, Allgreens challenged the fine in U.S. Tax Court, claiming that the IRS rules were unfairly applied to a compliant company that had paid its taxes on time.
A spokeswoman for the IRS refused to comment on the settlement, and it’s unclear whether the court’s decision will extend to other dispensaries that have been similarly fined for paying in cash due to a lack of banking service. Allgreen’s attorney, Rachel Gillette, thinks that it will: “Not applying (the penalty) to other businesses uniformly would be as ludicrous as having applied it in the first place.”
The agreement with the IRS marks the first federal concession to the cannabis industry since issuing guidelines to bankers on working with dispensaries in February 2014.
Photo Credit: eFile989
Get daily cannabis business news updates. Subscribe