IRS Files First Response to Common Industry 280E Arguments

The Internal Revenue Service (IRS) recently filed its first written response to arguments used widely by cannabis taxpayers as justification for not paying Section 280E taxes. The closely-watched U.S. Tax Court case, New Mexico Top Organics v. Commissioner, has been heralded as the critical vehicle for challenging the applicability of Section 280E to legally sold cannabis. The significance of the case for the cannabis industry is underlined by the fact two amicus briefs have been filed in support of the taxpayer’s position.