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 CFO.farm 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:
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 cpaverify.org 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. CPAVerify.com
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
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