Virtual Currencies Are Top Enforcement Priority In Cannabis Industry, Says IRS

Use of virtual assets in the United States cannabis industry has been on the rise, and the nation’s tax agency is keeping a close eye. The Internal Revenue Service recently issued a new notice asserting that the use of virtual assets in the CBD domain is a ‘top enforcement priority’ for the agency.

CBD is now legal in over thirty five states, with seventeen permitting it for recreational use. Nevertheless, in spite of the changing laws, the legacy banking system still avoids companies operating in this domain. This has led them to look for substitutes, and virtual assets have been on top of the list.

The Internal Revenue Service is interested in taxing gains made by cannabis establishments through the use of virtual assets. In a recent notice, the Small Business Division Commissioner of IRS, De Lon Harris, offered advice for the first time in this arising sector.

He mentioned,

“Another of our top enforcement priorities in the cannabis industry is the use of cryptocurrency. Those who use it need to understand that the IRS considers it property, and there are gains that are taxable.”

Meanwhile, the government is looking to collect much more in taxes from the digital asset space. In its recent Infrastructure Bill, the Biden administration sought to collect approximately twenty eight billion dollars from the domain.