IRS Audit Defense

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IRS Audit Defense

Going through an IRS audit is a fact of life for most cannabis companies. Preparing your books and accounting records for that day is a guiding principle here at The THC CPA's. Unfortunately the amount of bad accounting and tax advice that has been given to many in this budding industry is something that can't be taken back, but when working with The THC CPA's you can be comforted in knowing that you are working with a team that has over 100 years of tax and accounting experience, as well as CPA's on staff that have dealt with IRS audits for over 50 years.

Knowing your rights during an audit process, aside from having your accounting records in order, is another key to getting through an IRS audit. Section 7803 of the Internal Revenue Code spells these out, but most business owners don't have the time to read through these and understand the audit process. Additionally, the IRS requests for information must be in writing. While they may ask for some things verbally, getting all requests on an Information Document Request (IDR) is imperative to your defense.

Lastly, preparing all the information for the audit is the final key. Having your ducks in a row and presenting all IDR information in a clear and understandable manner is going to win you points with an auditor. Remember IRS auditors are people too and the easier you make their job to review the information they request, the better it goes for you. As my momma always said, you get more bees with honey!

If you're in the cannabis industry and haven't been audited yet, well then be grateful, but in our opinion, you can expect at some point to be audited and should be preparing for that day now.

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