IRS goes green: Hashing out payments from the marijuana industry

 In Decriminalization, Financial

Is there such a problem as having too much cash? The marijuana industry says yes. Because the industry is largely unbanked, it conducts most of its dealings in hard currency; and while the IRS is mandated to take tax payments in any form of legal tender, the high volume of cash coming in from taxed cannabis sales has proven difficult for the agency to handle.

Take the 800 active dispensaries and countless other marijuana-related businesses like growers and distributors in California alone: Most, if not all, want to pay their taxes today, but are having a hard time doing so. Their volume of business often means that they can owe the IRS hundreds of thousands of dollars and the agency currently does not have the consistent physical capability to process such large amounts of cash which requires in-person delivery, labor hours, secure rooms, and security. Now, the IRS is trying to solve that problem, joining the effort tech companies have been spearheading for years.

Recognizing the cash problem that faces not only the marijuana industry, but millions of unbanked individual taxpayers, the IRS is dipping its toes into more cash payment options. Last year, in partnership with payments solutions OfficialPayments.com and the PayNearMe Company, the agency launched an initiative for individuals to make a payment without a bank account or credit card at certain 7-Eleven store locations. However, the option is only available at select locations in 34 states, and there is a daily payment limit of $1,000. Thirteen dispensaries made it to the state of California’s most recent list of biggest corporate tax delinquents. The Kinder Meds Patient Collective Group, which owes the least amount in taxes, is on the line for $411,938. The biggest delinquent, the Compassion Center of Santa Barbara, owes $2.3 million. At $1,000 a day, it would take the Compassion Center six years and four months to pay off that debt.

Read more at accountingtoday.com