A recent ruling by the IRS (Beck vs. Commission) is an interesting one for the cannabis community.
A quick background on the story: It's 2007. Jason Beck had two dispensaries, one in West Hollywood and one in San Francisco. The DEA raided his West Hollywood dispensary in January 2007, and the collective was shut down for a week, but then reopened. Mr. Beck filed his taxes and claimed the DEA raid as Cost of Goods Sold when filing his 2007. He also claimed the raid as a loss on his tax return.
Mr. Beck was audited by the IRS, and the results of the audit showed he didn't really keep track of his sales receipts and inventory purchases (in fact he allegedly shredded inventory receipts and sales receipts before the IRS audit).
On August 10, 2015, the IRS ruled: The DEA Raid couldn't be claimed as Cost of Goods Sold because the marijuana was confiscated and not sold. Also, since Mr. Beck didn't keep accurate records and couldn't substantiate the loss he was claiming, the IRS wouldn't accept it.
The main take-away: Save your receipts and keep accurate books and records to substantiate your claims. With the current legislation, DEA raids are likely not to happen; however, local raids do. The IRS has ruled that confiscated marijuana can't be deducted, but this leads to greater questions to how to account for inventory shrinkage and write-offs.