Reported by Kyle Jaeger

The Internal Revenue Service (IRS) has issued a new memo clarifying the rules for reporting large cash payments between marijuana businesses, which the agency says should not automatically be considered “suspicious” just because of the federally prohibited nature of the industry.

In the memo, IRS says it is responding to a request for guidance on how cannabis businesses should approach Form 8300, a document that must be completed when a company receives a cash payment of $10,000 or more.

“The memorandum provides guidance on many of these issues in a question-and-answer format,” Charles Hall, special counsel with IRS, said. “We are working on additional guidance on questions related to cash couriers/armored cars who transport cash between growers/manufacturers and dispensaries/sellers.”

The document contains advice on a variety of compliance considerations, including best practices for identifying the type of business that received the cash payment. It says companies could disclose that their relation to “marijuana,” but those that don’t wish to specify could choose different categories that “might be more fitting” such as general agricultural product classifications.

Notably, while the federal Financial Crimes Enforcement Network (FinCEN) has longstanding guidance requiring financial institutions to file suspicious activity reports (SARs) for cannabis business clients, IRS said that, for its purposes, businesses shouldn’t check off a box reserved for suspicious cash transactions just because they’re involved in the marijuana industry.

Read full report: https://www.marijuanamoment.net/marijuana-industry-cash-is-not-necessarily-suspicious-irs-says-in-new-guidance-memo/