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Vetting Tax and Accounting Professionals [First of Three]

We have been in professional practice as certified public accountants for thirty-seven years. One of the core principles we learned early is that we need our clients to succeed, they take on entrepreneurial risk to runs a business and generate profits that pay their employees, and vendors. We as CPA’s are one of the many vendors that a business may use. Ultimately the only thing we have to sell is technical competence that business owners usually do not possess themselves and they should NOT be expected to have them. We joked the other day about what it takes to be a Cultivator and attempted to be very clear that we understand the difference between being a farmer and grower.

One of our associates is a partner with an Iowa based accounting firm and is involved with if you aren’t familiar we encourage you to check it out. Operating a farm is a complex business today that may require accounting, tax, predictive analytics, IT and engineering skills. We get that, and we view Cannabis Cultivation as an agricultural activity with “a plant that thinks it is special”. It is interesting that wine grapes have a similar attitude.

One of our favorite ways to illustrate this is to post this photo at the start of one of our presentations and ask people to tell us what this item is:

. The correct answer is my dog’s favorite toy…however asking the question has generated a fair number of red faces…the point being DON’T assume.

So now that we have a framework, let’s focus on identifying and vetting accounting, tax, and regulatory compliance professionals.

The U.S. Treasury - Internal Revenue Service [“IRS”] stratifies tax professionals into two broad groups. The group with the higher level professional credentials commonly referred to as Circular 230 Practitioners [Circular 230 refers to the rules that govern these professionals engagement in tax practice,

Circular 230 Tax Practitioners include Attorneys, Certified Public Accountants, and Enrolled Agents…FULL STOP.

The distinction is important, as we will explain - bookkeepers, “generic accountants”, "cannabis accountants, QuickBooks Pro Advisors and Advanced Pro Advisors that don’t have one of the three enumerated credentials are NOT Circular 230 Practitioners and can’t undertake many of the tasks the Circular 230 practitioners can

Validation of Circular 230 Tax Professional Credentials

The first step when you consider engaging a tax professional is verification of their credentials and review of professional disciplinary history.

Certified Public Accountants ["CPA’s] The tools available to perform that task include is a CPA lookup tool populated by official state regulatory data sent from Boards of Accountancy to a central database. The website represents the first ever single-source national database of licensed ‘ and CPA firms. Determine a CPA or CPA firm’s credentials without having to search each of the 55 Boards of Accountancy website individually.

Enrolled Agent Validation

The Internal Revenue Service provides a tool for the validation of Enrolled Agent credentials. Need to verify whether someone is an enrolled agent? You may email requests for enrolled agent status verification directly to [email protected]. Please include the following information in your request:

First and Last Name
Complete Address (if available)
Enrolled Agent Number (if available)

Attorney License Look Up

Lawyer Legion is our “go to” for attorney license lookups for all fifty states, legal associations, legal specialty credentials, and quick links for basic legal research. When seeking detailed access to information about members of the California Bar, you can find that here.

IRS Office of Professional Responsibility

Internal Revenue Service
Office of Professional Responsibility
SE: OPR – Room 7238/IR
1111 Constitution Avenue NW
Washington, DC 20224

Fax: 855-814-1722

There is a critical analysis that must be considered in much of the analysis of Confidence Levels Tax Reporting Positions

The Internal Revenue Service’s [“IRS’s”] Office of Professional Responsibility [“OPR”] is the point of contact for Circular 230 tax practitioner professional discipline and regulation.

OPR’s organizational structure includes three major segments: Office of the Director, Legal Analysis Branch, and Operations and Management Branch.

Our next post will address which type of tax and accounting professional can provide what services


Please elaborate on the above statement; what you feel it takes to be a Cultivator and what you believe to be the difference between a Farmer and a Grower.


There is no point as the statement was a reference to a prior post and is absolutely tangental and irrelevant to the post. Please let’s not hijack the thread with divergent topic. There won’t be any further response.

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I’ll address this (albeit somewhat tangential) point: I’ve definitely felt the difference between the grower and the farmer; however I think at our souls’ core the inner need to nurture life (in this case green life) remains constant regardless of the horticultural application. Commonalities aside, the comparison with the wine industry is befitting here.

I love this topic, thanks Jordan for the post and your unique insight into this facet of the industry!

I got a red face when I saw your dog’s toy too :smirk:


Thank you for your thoughtful reply to my earnest question. We are all here to learn from each other, and we each have our unique skillset and experience to contribute with generosity to the plant which has long been rooted in giving and kindness.


I couldn’t agree more! Happy to answer questions when I have an answer to contribute…that’s how we all learn!


If you look over the rest of the topics I have posted on this forum over the last two weeks, I would hope that my commitment to this industry should be absolutely obvious. If there was a separate thread, I would willingly have take the time to articulate a response. This thread hardly seemed the appropriate place to do that. My simple answers would be that the cultivators, growers, farmers and however you want to label them have diverse backgrounds, skills and attributes. Some are brilliant almost to the point of being magicians and wizards. Some are criminals…particularly the ones that use banned or illegal pesticides, etc. Some are just people that work hard to feed families like everyone else. So I can’t give you a simple answer.

What I can tell you is that I have seen quite a few very talented cultivators get into terrible problems with respect to accounting, taxes, licensing and regulatory compliance. Some have lost their businesses, and quite a few we have been able to help tremendously. The entire purpose of this thread was to begin to share some important knowledge for cultivators and everyone else in this forum that doesn’t do what I do to increase their knowledge of how to deal with this topic, so they can concentrate on what they do well.

I hope that clears any questions.


Thanks for that explanation! And a big :-1: to those cultivators using banned pesticides!


Hello Jszesq. I am new to this community and somewhat new to the industry – though a long time enthusiast and supporter. You have a lot more experience than me so please be patient. I’ve recently teamed up to create Cannabis Captive Insurance. Our website and vendors corner will be up in the next week or so. I believe this is an opportunity for cannabis businesses to mitigate risk, manage money, and protect assets all in one. With an 831b Captive company, the grower / distributer / retailer can design their own claims and transfer over $2M per year tax free, and once transferred to their Captive companies, that money is protected from any creditors of the original business. And after a year any funds not used for claims can be withdrawn as capital gains, under a lower tax rate, or used as a bank to borrow from (or just about anything else). It’s a great advantage because it re-purposes the money. What is your opinion on this? I know the IRS have been critical of these and trying to bust for tax evasion, but our team has access to former IRS director who designed the Captive 831b laws, and as such can assist in ensuring all bases are covered to protect from IRS-related issues.


Call me.


Just that I’ve learned I have to keep my mouth buttoned and not mention such details as it could get us in trouble. But here is the company we work with, who administers the Captive. I’d love to talk more please call if you have the time.

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I am going to decline for the time being. I wouldn’t have even posted anything but for the fact that this happens to my thread on a different topic. That’s why I looped it over to the technical thread on captives that I had started. I have a very clear understanding of both the structure and uses of an IRC Sec. 831(b) captive and while they serve a very specific purpose. If a company doesn’t tightly fit those criteria the product is a terrible choice…if you have not read

Risk-Pooled 831(b) Captive Insurance Companies And Bad Practices Take A Beating In Avrahami

IRS Notches Big Tax Court Win On 831(b) Captive Insurance In Avrahami Decision and

Avrahamis’ Captive Manager Apparently Calling It Quits After Decision

In fairness to both sides, the other side’s take is in
Exposing Forbes Contributor and Captive Insurance “Expert” Jay Adkisson

Before you invest any more time, please keep in mind that all of our cannabis industry clients are in California. California doesn’t have a captive insurance law. We are not interested in dealing with the headache of a non-admitted carrier. I trust that will be sufficient for me to disenage from this topic as I have work to do.

I have absolutely no worries about anyone “getting in trouble”. I run my firm, I happen to be a licensed CPA in Texas, and one of my former students is one of the sharpest captive attorneys in Dallas. Her name is Tracy Bowden and she is counsel to Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. Once upon a time, I was a Tax Partner with Arthur Andersen LLP, with worldwide responsibility for a small insurance broker by the name of Marsh McLennan.

Now that we are done with that, I have three calls and lunch meeting, enjoy your morning.

Of course in every industry there are people to either exploit or mis-use opportunities which can be helpful to others and they make a bad name. Three of the links you sent all relate to one isolated incident. Clearly, one needs to be careful and do the due diligence if they’re going to get involved with a captive manager. The team I work with have executed HUNDREDS, even close to THOUSANDS of Captives that have had no issues or problems whatsoever.

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What are you trying to accomplish here? It doesn’t make any sense for the two of us to have technical conversation about this underlying issues for a litany of reasons you are very well aware of. I was very clear in expressing my views on captives for the cannabis industry, and I put them in their own thread at

I didn’t touch one of your threads like you have managed to hijack this one. If you want to discuss the technical issues associated with captives, the other thread is the place I would do it. There isn’t a snowball’s chance in hell that I will ever advise a California based client to touch a multiple risk captive, and I am not going to make referrals I don’t believe is a commercially viable product. If you are seeking to argue, you will find what you are seeking here.

I am not going to agree with you, and I have already written six thousand words with my own thoughts on the topic. May I wish you an enjoyable afternoon, and ask that the discussion of captives in my vetting accounting professionals thread come to an end. Thanks.

Thank you both for keeping it civil! We can disagree without being disagreeable. :slight_smile:


Going to loop this back to my comments on IRC Sec. 831(b) captives

Just curiously what is the name of the 'IRS Director": you are referring to? Would it be Celia Clark, Esq by some odd chance?