A dramatic story on the complicated relationship between the IRS and cannabis businesses came to a conclusion Friday when former Internal Revenue Service agent Paul G. Hurley was sentenced to two and a half years in prison for accepting a bribe from a cannabis company last summer.
Hurley was working for the IRS, running a routine audit on Have a Heart Compassion Care in July 2015. Hurley worked with owner Ryan Kunkel to ensure that all of the company’s taxes were in order. He determined that Kunkel owed the IRS $292,175.41 for fiscal years 2013–2014.
The amount was much higher than it would be for a non-cannabis business due to IRS tax code section 280E, which doesn’t allow businesses that deal with a federally illegal substance to write off major business expenses.
The audit seemed cut and dried.
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