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Accounting & Tax Practitioners Need to Know Their Limitations

[Preface - this post is directed at accounting, tax and compliance practitioners, not the overall population of cannabis industry business owners. My hope would be that cannabis business owners would be aware of the issues, but for the most part, they rely on practitioners for advice and guidance]. Practitioners that don’t have are not attorneys with an LLM, or CPA’s with an MST [and both should have a minimum of fifteen years of practice experience] should reflect VERY carefully and perform a serious and probing self-evaluation of their skills before undertaking complex work for a client that is “above their pay grade.” I have seen several examples of that type of poor decision being made within this forum.

We published a topic with links to four highly complex discussions of various components of IRC Sec. 280E yesterday. [Keep in mind that I have been in practice for thirty-seven years, and qualified and testified in Federal Courts SD-NY, ED-NY, ND-IL, CA-2, CA-7 and CA-9 approximately eighty times which is the basis for my comments.] Just because you can cut and paste an article on the computer does NOT make you an expert, and everyone ought think very carefully about the assignments they accept…a client is depending on you.

Cannabis CPA Becomes Cannibal and you could be lunch. We just signed on our third cannabis industry expert witness in a professional liability litigation case in two weeks. You would think that we would be thrilled as these assignments tend to start in five digits and go to mid-six digits…nope, I have a pit in my stomach when I consider the reality that I am going to be part of a process that may DESTROY another accountant, EA or CPA’s career or life for that matter. Some people will play “holier than though” and suggest that we should turn down the assignment, and my response is HELL NO! When an attorney, EA or CPA takes on a cannabis industry client that has a complex business, and needs that vastly exceed their skills, it put that client’s life and livelihood at risk.

It also happens to be precisely the type of incompetence and negligent behavior that someone who I admire tremendously used to seeth over. Prior to 2009, most tax practitioners may have heard of the IRS Office of Professional Responsibility [“OPR”] some point in a professional ethics course. By the time she left OPR in 2015, Karen Hawkins, Esq. had made damn sure that every single one of us knew what OPR was, why it was there and what our responsibilities were. continued on our website at Cannabis CPA Becomes Cannibal