IRS Ignores Cannabis Operating Expenses in Collections

Mission Organic Center, Inc. v. Commissioner of Internal Revenue, decided December 16, 2025, explores a high-stakes Tax Court fight over whether the IRS could reject a cannabis dispensary’s $65,000 offer-in-compromise after calculating its reasonable collection potential at roughly $57.8 million. This case breaks down how Section 280E shaped the IRS’s treatment of marijuana-business operating expenses, why the Internal Revenue Manual became central to the dispute, and how the Court’s majority upheld the IRS’s policy-based approach while dissents raised serious administrative-law concerns. For cannabis businesses, tax professionals, and anyone following federal tax enforcement, the decision shows how state-legal operations can still face harsh federal collection rules when “real-world” expenses collide with 280E.
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Видео IRS Ignores Cannabis Operating Expenses in Collections канала Alex Y Dvorkin CPA