The Internal Revenue Service (IRS) is offering clarification for marijuana businesses amid a rule change related to reporting requirements for certain transactions in an effort to curb tax evasion.
In a notice published in the Federal Register last week, IRS announced that it has finalized a rule concerning micro-captive insurers, which are small insurance companies created by businesses to insure their own risks. Micro-captive insurers can enjoy tax benefits by electing to only be taxed on investment income, meaning they'd be exempt from premiums they received.
In an effort to crack down on tax avoidance from businesses that abuse that system, the agency is applying a new review standard.
During the public comment period on the rule, IRS said there was one submission from a person who "asked for guidance on how the proposed regulations will impact the cannabis industry."
Read more at Marijuana Moment