Elmer Cannabis Fudd – Dope CPA ??? – We spoke to a 24-year-old Cannabis Marketing Expert over the weekend. I am still in awe of her brilliance and embarrassed…she called me a “nerd”, “tax geek” and “your grandpa’s CPA”. Essentially said that everything I learned over the past thirty-seven years worthless. She said “no one cares about where you went to school, or that you were a Big 4 firm Tax Partner. What matters today is “buzz words”, flash and how many cool apps you use in your practice. She says, “you can’t imagine the damage you did to yourself by not becoming a Xero Ambassador or a Tax Super Ninja Guru”. Then she got me, with a pitch I couldn’t resist. Since she is so smart and none of you would ever think of this, here is what we are going to do.
I am going to change my legal name to “Elmer Cannabis Fudd“…any name that has “cannabis”, cannabiz, or 710 in it just SCREAMS expertise.
We are going to sign up to become “Dope CPA’s“…plain old CPA doesn’t mean much, sort of like Clown Accounting.
We are going to stop producing three thousand word articles since no one wants to read that much of this boring stuff.
Next, we are moving our headquarters to northern Idaho, about 60 miles east of Spokane, the WA…that way we will bee a major force in serving the Idaho adult-use cannabis market. We might as well open 77 virtual offices in our own minds as well
Elmer Cannabis Fudd – Dope CPA ???
Has the dripping sarcasm caught anyone yet? If you know me well it was obvious with the first line of this article. We are fed up, just sick and tired of the stream of gibberish, prattle, and blather that is flowing forth from many of our colleagues that serve the cannabis industry. It reminds me of the mix of effluent that spewed out of my dog’s backside after he ingested self-lighting charcoal briquets as a puppy and I gave him an enema mixed with seltzer to clean him out. [Note: If you insist on producing this kind of garbage, at least read Post Stupid Stuff – Make Sure Its Yours so you don’t get trapped by a plagiarism checker.]
Let’s get more specific…how many articles have you read on IRC Sec 280E that mention “Cost of Goods Sold” or the CHAMPS case and don’t say much of anything else. Well here is what we have said about IRC Sec. 280E in the past three months:
Do you detect a difference between us and Cleatus Smelly EA, the Dope CPA, the Idaho Cannabis CPA and every other master of “cannabiz” and “buzz words”? Yea I know we seem kind of arrogant and really abrasive…well folks twenty years in transactional practice in New York will that to you.
As a takeaway, we are going to bring back a really old and kind of amateurish piece of Photoshop I did…after a client describes me to a prospective client as an “Israel Defense Forces D9 Armored Bulldozer with the reverse gear removed…look out Cletus…
Cannabis Biz Funding For Dummies is our revenge on the sleaze bag venture capitalists that have descended on the cannabis industry. They range in sophistication from the “pushers” of prefabricated business plan templates [which all seem to use a $1,800/lb assumption for the price of flower] to the self-aggrandizement experts that offer “turnkey operations” in California that don’t even know that state Cannabis licenses are non-transferrable.
The first rule we always explain to founders that are seeking to create a venture-funded entity that asks why they need a CPA, we tell them “to prevent you from being killed off by payroll taxes, business permits and a host of other little items before their “next greatest idea” is discovered by the market. We are talking about straightforward business principles.
Our suggested steps down the path are:
Do your research and use resources which are available for free on the internet [more on this in a bit].
Build it yourselves rather than investing $$$ in someone else’s leftovers
Places to Start
Y Combinator provides seed funding for startups. Seed funding is the earliest stage of venture funding. It pays your expenses while you’re getting started. They are a legend in the venture start-up space, and the resources they offer are staggering. Let’s start with their Resources page. The first items we find there are:
YC Essentials. – What we at YC consider the most critical, most transformative advice for startups.
There are enough reading and information there to keep the founders of a startup busy for a month. Then when you think you are ready to go hunting for funding they have:
Which should get founders that are willing to work hard, read and then put their thoughts together and discuss with the CPA and attorney that should be brought in at the start. The result should be the genesis of a focused team that can get a startup business well down the path to pitching investors which ideas and a deck of their creation. We guaranty it will beat the piss out of the templated business plans that are sold to start-ups by the “Merchants of Slime”.
Humboldt Marten Review illustrates an example of the complexity and delicate balance that the legal cannabis industry faces with the environment in northern California. This status review report contains the most current information available on the Humboldt marten (Martes caurina humboldtensis) and serves as the basis for the California Department of Fish and Wildlife’s (Department) recommendation to the California Fish and Game Commission (Commission) on whether to list the species as threatened or endangered under the California Endangered Species Act. The Environmental Protection Information Center and the Center for Biological Diversity, as joint petitioners, submitted a “Petition to List the Humboldt Marten (Martes caurina humboldtensis) as an Endangered Species under the California Endangered Species Act” (Petition) to the Commission on June 8, 2015. At its scheduled public meeting on February 11, 2016, the Commission considered the Petition and based in part on the Department’s petition evaluation and recommendation found that sufficient information existed to indicate the petitioned action may be warranted and accepted the Petition for consideration.
Upon publication of the Commission’s notice of its findings, the Humboldt marten has designated a candidate species on February 26, 2016. Humboldt martens are currently designated a California Species of Special Concern, a non‐regulatory designation intended to focus attention on animals at conservation risk, stimulate research on poorly known species, and achieve conservation and recovery of these animals before they meet criteria for listing as threatened or endangered under the California Endangered Species Act (CESA; Fish & G. Code, § 2050 et seq.). Additionally, Humboldt martens throughout their range in California and Oregon are currently under review for listing as threatened or endangered under the federal Endangered Species Act by the U.S. Fish and Wildlife Service. Species Description, Biology, and Ecology ‐ Martens have yellowish to dark brown fur with a contrasting lighter chest patch, the long, sleek body from typical of members of the mustelid (weasel) family, a relatively long bushy tail, and typically weigh 0.4‐1.25 kg (0.88‐2.76 lbs.).
Humboldt martens in California have subtle physiological differences from Sierra martens (M. caurina sierra) which also occur in California. Within California, Humboldt martens historically occupied near‐coastal forests from Sonoma County north to the Oregon border; however, the current distribution within the state is limited to two small areas of Del Norte, northern Humboldt, and western Siskiyou counties, a small fraction of the historical range. Humboldt martens breed once per year and females typically first give birth at two years of age and reach peak productivity from three to five years of age, although not all females attempt to breed each year. Kits are born in natal dens where they remain completely dependent on the mother for seven to eight weeks, after which the mother typically moves them to one or a series of maternal dens until the kits disperse, typically in late summer.
Dispersal distances of Humboldt martens are largely unknown but likely similar to distances of other North American martens, which typically average less than 15 km (9.3 mi.). Available information suggests that home ranges of Humboldt martens are similar to Sierra marten home range sizes in California, 70 – 733 ha (173 – 1,811 ac.). In California, Humboldt martens subsist on a diet composed primarily of small mammals (squirrels, chipmunks, and voles) and birds, and to lesser degree reptiles, fruits, and insects. Known predators of martens in North America include bobcats, coyotes, foxes, fishers, and great‐horned owls, with bobcats being the primary predator of Humboldt martens in California.
Humboldt martens in California are associated with two distinct habitat types: late‐successional coastal redwood, Douglas‐fir, and mixed conifer forests with dense mature shrub layers; and serpentine habitats with variable tree cover, dense shrub cover, and rock piles and outcrops. Consistent among the two habitat types is the requirement for structures for denning, resting, and escape cover. In late-successional forests, structures used include tree cavities, defects, snags, and logs; while in serpentine habitats rock piles and outcrops are commonly used in addition to tree structures. Humboldt martens also rely on extensive stands of dense shrub cover in both habitat types.
Status and Trends ‐ There are no historical Humboldt marten population estimates available, but anecdotal evidence from early naturalists and trapping records suggest the species was far more common and widespread in the early 20th century than they are today. The California population is currently estimated to number fewer than 200 individuals. It appears the Oregon population also numbers fewer than a few hundred individuals and there is uncertainty about the degree to which animals in Oregon and California interact and exchange genes. Humboldt martens historically ranged from the coastal forests of northwestern Sonoma County north to Oregon’s Curry County within the narrow humid coastal zone (Figure 1).
The historical described range was roughly 22,000 km2 (8,500 mi2 ). By the 1940s, a significant decline in Humboldt marten trapping returns was noted and a retraction of the southern end of the range appears to have occurred. In California, over the last 25 years Humboldt martens have only been detected in Del Norte, northern Humboldt, and extreme western Siskiyou Counties; suggesting a range reduction greater than 93% (Figure 2). Threats ‐ The Department has identified multiple potential threats to the long‐term persistence of the California Humboldt marten population. Some of these threats are largely the result of historical practices while others are ongoing.
Ongoing threats include habitat loss from timber harvesting, wildfires, urbanization, cannabis cultivation; elevated predation rates; exposure to toxicants and diseases; climate change; and risks inherent to small populations. Historical accounts suggest that trapping pressure on Humboldt martens in the late 19th and early 20th centuries was intense, and declines in the population were noted by the early 1900s. Marten harvest continued essentially unchecked until 1946 when the Commission instituted the first Humboldt marten trapping closure. Historical trapping, coupled with habitat loss, was likely the cause of the dramatic reduction in the marten’s California range.
Today, trapping of Humboldt martens is prohibited in California and no longer poses a significant threat to the population. In addition, the probability of unintended bycatch is extremely low due to current trapping regulations and the low number of active trappers within the extant range. Humboldt marten populations have been negatively impacted by historical and ongoing habitat degradation and loss from timber harvesting and other silvicultural treatments of older forests, wildfires and associated salvage logging, development of coastal forests for human settlement, as well as the clearing of forests for the cultivation of cannabis.
Forest conditions in the range of the Humboldt marten today have largely been shaped by a legacy of over 100 years of logging and timber management which has reduced the area of old growth conifer forest in the Pacific Northwest by an estimated 72% since European settlement. In recent decades the logging of old growth forest stands on private and public lands has dramatically slowed from peaks in the second half of the 20th century due to more restrictive regulations and market conditions. However, it will likely take decades for the forest stands degraded and fragmented from historical logging to recover the dense shrub cover, and centuries to recruit the large tree structures needed to restore high-quality Humboldt marten habitat conditions.
Humboldt marten habitat suitability may be reduced under commonly used timber harvest methods through reduction of overstory canopy cover and the loss of dense shrub cover. Shrub layers can be destroyed or degraded through post‐harvest stand management treatments such as burning, mechanical clearing, herbicide application, and through competitive exclusion by densely planted conifers in plantations which shade out understory shrubs. Shrub cover has been found to be more patchily distributed in thinned stands than in old-growth stands on federal forest lands, and decades are required to restore dense shrub layers following harvests. Wildfires and the associated salvage logging of damaged trees can threaten the already small Humboldt marten population by reducing and fragmenting the remaining habitat.
On federal lands in north coastal California, there was a net 5.6% loss of old forest habitat over the period of 1993‐2012, primarily attributed to wildfires, despite gains from forest succession. Connectivity between old forest stands was found to have decreased over the same period, mainly due to fragmentation caused by wildfires. Large fires in southwest Oregon (the 2002 Biscuit Complex Fire and 2017 Chetco Bar Fire) have likely isolated the California – Oregon border Humboldt marten population from the two extant Oregon population areas (Figure 7). Additionally, vegetation management activities designed to reduce the risk of wildland fire by removing shrubs, reducing canopy cover, and removing snags and logs can degrade marten habitat and contribute to habitat fragmentation. Humboldt marten researchers and land managers consider wildland fire a serious threat to the extant population in California, estimating that a single large fire could eliminate 31% to 70% of the currently occupied habitat.
Humboldt Marten Review
The negative impacts of wildland fires on marten habitat vary with the intensity of the burn and include the removal of large tree structures and dense shrub layers as well as the fragmentation of habitat. The number of fires, mean fire size and annual area burned in northwestern California were all found to have increased over the century from 1908 – 2008, suggesting the threat to Humboldt martens from wildland fires is increasing. Habitat loss and degradation from human settlement and residential development rapidly increased in the 1850s, and several portions of the historical range have been converted from forests to urban areas, primarily in and around Crescent City, Humboldt Bay, Fortuna, Fort Bragg, and Willits; and much of the historical range south of Del Norte County has been parceled and occupied by very low-density housing.
However, the core population areas currently occupied by Humboldt martens in California are almost entirely unoccupied by humans, with the exception of some areas adjacent to the Klamath River on Yurok Tribal lands. While further human development of the historical range will likely continue into the future, a modeled analysis of future land conversions under several human population growth scenarios found the probability of significant conversions to urban and agricultural uses in the northwest California coast region to be very low for the remainder of this century.
Large‐scale marijuana cultivation in remote forests throughout California has increased since the mid‐ 1990s, coinciding with the passage of California laws legalizing certain uses of cannabis. Cultivation can impact Humboldt martens through the clearing and fragmentation of forests and the application of pesticides, including highly toxic anticoagulant rodenticides. Humboldt and Del Norte counties are known centers of legal and illegal cannabis cultivation in California due to the remote and rugged nature of the land and abundant water sources, although to date a relatively small percentage of the land area has been impacted by these practices. The extent to which land clearing for legal and illegal cannabis cultivation will contribute to future Humboldt marten habitat loss and degradation is unknown.
New cannabis rules in California released Tuesday highlight again how fractious the state’s industry remains. The regulations also put the spotlight on the political influence wielded by a technology company that isn’t governed by the rules it has been lobbying to change.
Several cannabis industry insiders say the updated regulations – issued by the state Bureau of Cannabis Control – favor a business model championed by Eaze, which runs a website and smartphone app through which consumers can place delivery orders for cannabis.
But unlike cannabis delivery companies and retailers, Eaze isn’t required to possess state permits because orders placed with the firm are filled by licensed retailers. That situation has turned the business into a divisive flashpoint for many licensed companies that have had to deal with the red tape and costs of obtaining state permits.
The new rules are also an about-face from May 18 regulations, some industry insiders say, indicating that Eaze has significant political pull with state officials who are overseeing the rulemaking process.
At the center of the storm is the Bureau of Cannabis Control’s rules in Section 5418, which was intended to clarify last year’s emergency regulations prohibiting the so-called “ice cream truck” model of delivery, industry insiders said.
But the updated regulations announced Tuesday appear to allow that model, a move that would permit delivery companies to operate roving trucks that are stocked like a retail store and fill orders as they are placed online.
[Abbreviations – California Dept. of Public Health (“CDPH”), the California Dept. of Food and Agriculture (“CDFA”), the California Department of Tax and Fee Administration (“CDFTA”); and the Bureau of Cannabis Control (“BCC”)]
“In previous discussions (with regulators),” Domingo said, “it was said the intention of the regulation was to be prepackaged orders from the point of origin to the point of sale, but now, (Section) 5418 has completely removed all of those requirements.“It actually explicitly says you’re only required to have one designated order, and you can carry up to $10,000 worth of product. So if that’s a $60 order, you can have $9,940 worth of loose product in your car, which is pretty crazy.”
California Emergency Regulations – Inside The triumvirate of California cannabis industry regulators – Bureau of Cannabis Control [“BCC”] [Retail and Distribution Licenses, Event Licenses], California Dept. of Food and Agriculture – “CDFA”’s CalCannabis [Cultivation Licenses, and California Department of Public Health [“CDPH”]’s Manufactured Cannabis Safety Board [“MCSB”] extended Emergency Licenses for 180 days.
Applicants may complete one license application and request an A-designation, an M-designation, or both for the license.
Regardless of designation requested, applicants, will pay one license fee
Licensees may engage in commercial cannabis activities with any licensee, regardless of designation.
A financial interest includes an agreement to receive a portion of the profits of a business.
Clarifies what items must be identified on a premises diagram so the bureau can determine whether the proposed premises meet the requirements for licensure.
Requires use of the Commercial Cannabis Licensee Bond form under Title 11, California Code of Regulations, Article 56, Section 118.1 (Title 16, California Code of Regulations section 5008).
Clarifies a licensee’s notification requirements when there are certain modifications to the business (e.g., standard operating procedures, license designations, premises location).
Fees have been revised to account for the proposed licensing changes and better reflect the updates in funding needs.
Prohibits advertising or marketing from using depictions or images of minors under 18 years of age.
Clarifies activities licensees may conduct on their premises. Licensees authorized for retail sales may not sell or deliver cannabis goods through a drive-through or pass-out window. Deliveries of cannabis goods shall not be made to people within motor vehicles.
Clarifies premises location restrictions. Proposed premises shall not be within a private residence or in a location that requires persons to pass through a private residence.
Provides that premises adjacent to other premises engaging in manufacturing and cultivation must be separated by walls and doors.
Identifies certain security personnel requirements, including age restrictions, qualifications, and when security personnel is required.
No longer requires non-storefront retailers to have security personnel
Clarifies requirements for sharing security personnel, video surveillance systems, and alarm systems when multiple premises are contained in the same building.
Identifies door and lock requirements for limited access areas.
Allows distributors to relabel packages with the accurate amount of cannabinoids and terpenoids post-laboratory testing in certain circumstances.
REMEDIATION • Restricts remediation of cannabis goods that fail to test to licensed manufacturers.
Clarifies the requirements for the transportation of cannabis goods. Permits for cannabis goods to be transported by foot, forklift, or similar means, when cannabis goods are transported to premises located in the same building or same parcel of land.
Allows security personnel, licensed by the Bureau of Security and Investigative Services, to be in a transport vehicle.
Clarifies how a distributor may verify that cannabis goods received are accurately reflected in the shipping manifest without unpacking and inventorying all boxes.
Permits a delivery employee to complete multiple deliveries of cannabis goods if they are prepared by the retailer prior to the delivery employee leaving the licensed premises. The total amount of cannabis goods in the delivery vehicle may be up to $10,000. Requires delivery drivers to conduct age verification of customers.
Clarifies microbusiness requirements. Also provides that areas of the premises designated for manufacturing and cultivation must be separated from the distribution and retail areas.
Licensees are no longer required to collect field duplicate samples.
Clarifies laboratory limit of quantification (LOQ) requirements for all Category I residual solvents or processing chemicals.
Clarifies laboratory LOQ requirements for all Category I residual pesticides.
Adds malathion and its corresponding action levels to Category II residual pesticides.
Clarifies certain Certificate of Analysis requirements when a content label is affixed to the cannabis or cannabis product batch at the time of testing.
PRACTICAL POINTERS FOR LEASING AND SHARED FACILITIES
“Premises” distinctions defined. SB 94 and AB 133, the statutes enacted in 2017 to implement and refine Prop 64, both defined a licensed “premises” as a “designated structure” that is held “under the control” of the licensee for commercial cannabis activity and must be contiguous and held by only one licensee. The statutes did not, however, define what those terms meant with regard to physical segregation of licensed spaces, which is an important factor for places like warehouse spaces where multiple tenants want to operate concurrently, or any rental space with common areas. The new emergency regulations address this issue by clarifying that for the areas of licensed premises required to be under a licensee’s exclusive control for operations, actual walls and locked doors will be required, but that common or shared spaces will be allowed for multi-tenant spaces without violating that requirements.
The potential for shared entrances. The new rules contemplate the use of a shared entrance so that each licensed premises need not have its own exclusive access to the outside world. The catch, however, is that if neighboring licensees share a common entryway, and state inspectors are prevented from accessing licensed premises due to neighboring licensed premises preventing passage, then both licensees shall be responsible for the access violation and subject to discipline.
No change to license stacking – But despite all the controversy, the new regulations do not change the situation: a single licensee can still hold an unlimited amount of cultivation licenses each for up to 10,000 square feet of canopy, with no requirement that those licenses each have separate and distinct premises.
Strict separation of residential and commercial buildings – The rules now require that the premises diagram in the license application clearly define which buildings on site are residential and which are commercial, and prohibit any licensed premises from being located within a private residence or from requiring a person to pass through a private residence to access the licensed premises.
Expanded access to shared utilities – The new emergency regulations provide additional opportunities for tenants in a multi-tenant building or shared space to pool resources, including security camera systems, security guard services, and alarm systems. The catch, however, is that if multiple licensees decide to share such resources, each licensee is responsible for the violation of any regulations by any other licensee as it pertains to the shared resource.
Smelly Stinky Nefarious Tax Practice – New Home is SmellyStinkyEA.com which is a website where we intend to highlight several situations where egregious examples of tax practice at its worst that we believe need to be eradicated. They include:
Abuses of the OVDP Program and advisors offering US tax advice without being part of the US tax system.
“Unprofessional, incompetent or outright fraudulent conduct relating to the representation of taxpayers in connection with tax collection issues.”
Unprofessional, incompetent or outright fraudulent conduct representation in connection with California’s commercial cannabis industry.
While the basics of the regulation of US tax professionals will remain on this site, the bulk of future activity relating to this topic will be moved to the Smelly Stinky EA site.
Validation of Circular 230 Tax Professional Credentials
Certified Public Accountants
The first step when you consider engaging a tax professional is verification of their credentials and review of professional disciplinary history. The tools available to perform that task include cpaverify.org is a CPA lookup tool populated by official state regulatory data sent from Boards of Accountancy to a central database. The website represents the first ever single-source national database of licensed ‘ and CPA firms. Determine a CPA or CPA firm’s credentials without having to search each of the 55 Boards of Accountancy website individually. Regulation CPAs Accountants Tax Pros
Enrolled Agent Validation
The Internal Revenue Service provides a tool for the validation of Enrolled Agent credentials. Need to verify whether someone is an enrolled agent? You may email requests for enrolled agent status verification directly to [email protected]. Please include the following information in your request:
aBIZinaBOX WordPress Platform Workflows -aBIZinaBOX Inc. Cannabis Practice Group is excited to announce that starting this Friday, May 4, 2018, we are going to share a series of five blog posts where we explain how we build forms, workflow, views and platform integration on our WordPress site, and for our clients. The posts are already live, but password protected until we complete a “shakedown cruise”. The series will include:
are seeking to charge insane premiums to allegedly “bring accounting and tax firms into the light” by positioning them to use technology in their practices. The difference between “us and them” is that they are either twenty-somethings that are under the delusion that technology with giving them an advantage for marketing, platform growth, etc…to which we call
Many of the Founders involved with these businesses are decent accountants, tech people, coders, etc. What every single one of them lacks is what we have:
Between the two principal partners at this firm, we have roughly EIGHTY years of “hands-on” experience as professional accountants. We both attended the University of Texas – Austin MS Tax Program which has been ranked as a top three program in the Graduate Program in the United States for the past FORTY YEARS!
Both of us were Tax Partners at Big 4 firms…we didn’t “grow up” working from home…we worked our butts of serving some of the largest enterprise companies in the United States including Tishman Speyer Properties, Marsh & McLennan, just about every major publicly traded REIT and investment bank on Wall St.
Jordan S. Zoot had oversight responsibility for providing technology to the desktops of > 20,000 tax professionals in the United States at a point when broadband didn’t exist. He was responsible for > 350 professionals and > $400MM in net fees for a division or Arthur Andersen LLP.
By all means, go ahead and ask the people at those other firms about how much actual experience they have managing revenue and expenses or practice risk in a large practice…we know the answer.
We really aren’t looking to compete with these firms, we are settled and enjoy what we do. We are actually both committed to “giving back” to the profession that has provided tremendous opportunity to live an experience that most in the profession will NEVER have the opportunity to see. I remember hearing someone say, “If you love what you do, you won’t ever work a day in your life”. While I doubt anyone can make that statement every day, on the whole, after thirty-seven busy seasons, I can say that, and I look forward to another twenty at least, if my health and sanity will permit it.
The second challenge is doing everything we can to support businesses in the commercial cannabis industry in California. We are going to save the rest of that for another post.
aBIZinaBOX WordPress Platform Workflows
Finally, let’s not forget to ask Smelly and Stinky how much support they are getting from the Xero Partner Program in the United States.
California Combined Cannabis Business Representation Credential – CCCBRC
California Combined Cannabis Business Representation Credential – CCCBRC came to me in a dream last night. Either that, or it was a nightmare. No, it was a dream; the nightmare is the situation that those of us that represent commercial cannabis businesses in California are currently living with. The nightmare is having to deal with somewhere between a half dozen to a dozen different state agencies each of which has different rules and procedures for the representation of individuals and businesses that are involved with the cannabis industry. Don’t forget our thoughts on how NOT to become an expert.
Relevant Definitions – Circular 230 Practitioners
We need to introduce some terminology and background to understand both the problem and a very elegant potential solution. The first aspect is the concept of a relational database, a relational database management system [“DBMS”] and the key element in a database, which is a common unique identifier or “CUI”. The relevant definitions are:
Relational Database – A relational database, more restrictively, is a collection of schemas, tables, queries, reports, views, and other elements. Database designers typically organize the data to model aspects of reality in a way that supports processes requiring information, such as (for example) modeling the availability of rooms in hotels in a way that supports finding a hotel with vacancies.
Database Management System [“DBMS”] – is a computer-softwareapplication that interacts with end-users, other applications, and the database itself to capture and analyze data. A general-purpose DBMS allows the definition, creation, querying, update, and administration of databases.
Common Unique Identifier [“CUI”] – is a unique identifying record that has been vetted, verified, and is maintained in a secure repository such that it is accepted as a reliable means to identify an individual or item. The most common examples are social security numbers [“SSN”], driver’s license numbers [“DLN”], and vehicle identification numbers [“VIN”].
There are substantial concerns about the privacy of personal financial information such that SSN and DLN information is not the preferred choice for the purpose that I have in mind. However, the license number for an attorney or certified public accountant [“CPA”] issued by a State, or the registration number issued by the US Treasury – Internal Revenue Service [“IRS”] to an Enrolled Agent [“EA”] are other examples of such numbers.
Each represents publicly available information for a group of individuals that has already been granted the right to represent both individual and business taxpayers in every jurisdiction in the United States [collectively, they are referred to by the IRS as “Circular 230 Practitioners“]. The individuals in this group have had their personal identification verified, usually including US passport, driver’s license or state identification, fingerprints, and in some jurisdictions DNA independently verified by the issuer of their credentials. The academic credentials, and satisfaction of required examinations and experience have also been verified [we note that the deficiency for EA’s is a lack of education and experience requirement, which we have previously discussed and you can read about here.]
Additional CUI’s Which We Rejected
We are aware of additional CUI’s such as:
Preparer Tax Identification Number [“PTIN”] is an identification number that all paid tax return preparers must use on U.S. federal tax returns or claims for refund submitted to the Internal Revenue Service (IRS).
California Tax Education Council [“CTEC”] –is a registration which is unique to California [New York and Oregon are examples of additional states which have similar programs]. California law requires anyone who prepares (or assists with) tax returns for a fee, and is not an attorney, certified public accountant (CPA) or enrolled agent (EA), to register as a tax preparer with CTEC.
Both of these CUI’s represent individuals with substantially lower levels of experience, education, validation and verification than Circular 230 Practitioners. As such, while they may have some skills and provide a useful service, they are not appropriate at this point in our analysis.
Circular 230 Databases Currently In Use
Just to provide additional background on relational databases currently in use to verify or validate Circular 230 Practitioners in California that are currently in use, we have:
There are similar search and lookups provided in all of the US states and territories, and the ability to verify firms and professional service entities are available. You can read more about them here. As an outstanding example of how multiple lookups can be combined, we highlight CPAVerify.com, a project of the National Association of State Boards of Accountancy [“NASBA”].
CPAverify is an online central repository of information about licensed CPAs and public accounting firms maintained by the National Association of State Boards of Accountancy (NASBA) to provide a single-search resource covering participating jurisdictions where a person or firm has been licensed. With the widespread adoption of mobility, the need for the general public to be able to determine if a person or firm is licensed and in good standing is more prevalent than ever.
Just to provide an illustration, here is what is returned when I look myself up on CPAVerify.
Inter-Agency Databases In Use Today
There are several states that already provide comprehensive portals where tax professionals can register themselves, as well as individual and business entity clients that they represent, to obtain confidential taxpayer information as well as file tax returns and make payments on behalf of their clients. As an example we highlight several that we consider being the most advanced, secure and well executed:
View estimated payments and credits before filing a return.
Verify the exact business entity name to use when filing a return.
View payment history.
View a list of tax returns.
View images of tax returns.*
View a list and images of notices and correspondence.
Update contact information.*
View proposed assessments.
View California wage and withholding information – individual clients only.
View FTB-issued 1099 information – individual clients only.
Calculate a balance due for a date in the future.
File a power of attorney (POA).
File a nonresident withholding waiver request.
Protest a proposed assessment.*
Respond to a proposed assessment to request a 30-day deferral to file a tax return.*
Options to communicate with us:
Chat with an FTB representative about confidential matters.
Send a secure message with attachments to FTB.
Further, FTB makes the following services available to Tax Practitioners that can be reviewed here.
California Dept. of Tax and Fee Administration [“CDTFA”]– Form CDTFA-392 is already in use and common to CDTFA and the California Employment Development Department [“EDD”] though at this time, the current requirements require a separate form even if identical information is provided be provided to each agency. Further, CDTFA already has an electronic services portal that Circular 230 Professionals can access for multiple individuals and business entities after completing a Power of Attorney registration process for each. A snapshot of the main Online Services screen appears below.
California Cannabis Regulatory Agencies – Combined Access
The triad of California agencies with direct regulatory oversight of the commercial cannabis industry –
California Bureau of Cannabis Control [“BCC”] – Distribution and Retail Licenses
have already integrated their Online Licensing and Registration Portals and share all kinds of information for all kinds of licenses. The information is on the BCC website:
when a prospective applicant takes the next step and selects the Online Licensing Portal for ANY license they are taken to:
Once the log-in and authentication process is complete, BCC presents the applicant with the choice that involves all three distinct agencies:
All of which illustrates that the inter-related relational database concept linking multiple agencies is not only possible, but the California cannabis regulators have already implemented the baseline version.
What Additional Features Should CCCBRC Include for Implementation?
If you have stayed with this and gotten this far, permit us to present “CCCBRC Nirvana”.
Let’s start with the BCC Online Licensing Portal and Add:
State Bar and Board of Accountancy for Circular 230 Professional Online Validation of Attorneys and CPA’s [sorry Enrolled Agents you are gonna have to send in paper forms until IRS modernizes the EA verification process]
Having taken you this far, now we swing for the fences and use Humboldt County, CA to illustrate the importance of county and municipal governments in the California cannabis regulation scheme, starting with zoning and land use which is an absolute requirement that an approval be obtained for many of the California state level licenses.
Finally, if Humboldt County doesn’t seem quite sufficient, what about land use and Chapter 5 of the Code in Los Angeles. If you would like another 4,000 words to read, you can go here.
We would really appreciate your thought and comments, particularly if you are a California Cannabis CPA or other Circular 230 Professional serving California cannabis industry clients, please consider joining our Facebook Group for Circular 230 Cannabis Industry Professionals. There you have it, the dream or nightmare of a California Combined Cannabis Business Representation Credential. Back to reality, let start by getting BCC, CDPH and CDFA to permit Circular 230 Professionals to represent licensees and applicants, and yes you can read about that issue here.
AG Sessions – DOJ Abrogates Cole Memo In a seismic shift, will announce Thursday that he is rescinding a trio of memos from the Obama administration that adopted a policy of non-interference with marijuana-friendly state laws, according to a source with knowledge of the decision.
While many states have decriminalized or legalized marijuana use, the drug is still illegal under federal law, creating a conflict between federal and state law.
The main Justice Department memo addressing the issue, known as the “Cole Memo” for then-Deputy Attorney General Jim Cole in 2013, set forth new priorities for federal prosecutors operating in states where the drug had been legalized for medical or other adult use. It represented a major shift from strict enforcement to a more hands-off approach, so long as they didn’t threaten other federal priorities, such as preventing the distribution of the drug to minors and cartels.
The memo will be rescinded but it’s not immediately clear whether Sessions will issue new guidance in its place or simply revert back to older policies that left states with legal uncertainty about enforcement of federal law.
Opponents of legal marijuana on Thursday celebrated the long-awaited action.
“It’s pretty clear that the federal policy is going to be that U.S. attorneys will have discretion and the industry can no longer hide behind the Cole memo and say that they’re protected,” said Kevin Sabet, who worked in Obama’s Office of National Drug Control Policy and now runs the anti-legalization group Smart Approaches to Marijuana. “There is an unknown here because we don’t know how this is going to be implemented.”
It was not immediately clear when Sessions will formally revoke the agreement, authored in 2013 by then-Deputy Attorney General James Cole.
The move is likely to put the federal government in conflict with states where marijuana is legal for recreational use. California on Monday became the sixth state to legalize recreational marijuana. Massachusetts and Maine are set to join those states later this year.
“It’s really the beginning of the story, not the end,” Sabet said.
Legalization has led to a booming marijuana business in some states, where wealthy growers and even hedge funds have invested millions of dollars in production and sales. Some industry analysts peg the North American cannabis market at $10 billion in annual sales.
We are watching the issue carefully and will follow up and update everyone that shares our concerns over the insane policy.
aBIZinaBOX Cannabis Practice – Launches Management Site Its 8 PM on Friday, December 15 and that means we have two weeks to the deadline for legal recreational cannabis in California. We have noticed that everyone isn’t thrilled with the legalization that they had been clamoring for….for years. The reality is cannabis is going to be … Continue reading “aBIZinaBOX Cannabis Practice – Launches Management Site”
aBIZinaBOX Cannabis Practice – Launches Management Site Its 8 PM on Friday, December 15 and that means we have two weeks to the deadline for legal recreational cannabis in California. We have noticed that everyone isn’t thrilled with the legalization that they had been clamoring for….for years. The reality is cannabis is going to be … Continue reading "aBIZinaBOX Cannabis Practice – Launches Management Site"