Case: Appeals Officer Abused Discretion in Medical Marijuana Dispensary’s Tax Case, Orders Supplemental Hearing (T.C. Memo)

The U.S Tax Court held that the appeals officer abused her discretion in sustaining the IRS’s determination to collect taxpayer’s 2021 tax debt, remanding the case for a supplemental hearing. Taxpayer, a medical marijuana dispensary, had gross receipts of over $16 million in 2021 and owed $331,517 in taxes after the IRS disallowed nearly $3.5 million in expenses under IRC §280E. Taxpayer submitted an offer-in-compromise (OIC) to settle its tax debts for 2016-2021 for $65,000. The IRS sent notices of intent to levy, and taxpayer requested a collection due process (CDP) hearing, seeking currently-not-collectible status or approval of the OIC. ...