Tax Law

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Relief from Tax Filing Deadline for Oregonians in Wildfire Areas

In a September 16, 2020 press release, the IRS offered Oregonians living in certain counties affected by the recent wildfires some breathing room from the upcoming October 15, 2020 deadline to file their returns. This relief assumes the taxpayer filed the automatic extension from the already extended July 15, 2020 deadline for this tax season due to the Covid-19 pandemic. The Oregon Department of Revenue has also released guidance stating Oregon has followed the IRS and extended the filing deadline for the required state returns.

Who benefits from this tax filing deadline relief? Oregonians living in or operating a business in Clackamas, Douglas, Jackson, Klamath, Lane, Linn, Lincoln, and Marion counties. The IRS and Oregon Department of Revenue will now allow additional time for those taxpayers from the listed counties to file their 2019 tax returns.

How much time? Until January 15, 2021. The recent guidance does not state anything needs to be filed or requested in advance for this filing extension. Nor do you need to have experienced a loss of your home or personal belongings to benefit from this extension in the listed counties.

What exactly is extended to January 15, 2021? Third quarter estimated tax payments that were due September 15, 2020; individual, corporate, and estate and trust income tax returns; partnership returns; S corporation returns; trust returns; estate, gift, and generation-skipping transfer tax returns; annual information returns of tax-exempt organizations; and, employment and certain excise tax returns that have an original or extended due date occurring on or after September 7, 2020 and before January 15, 2021 are now all due on or by January 15, 2021.

Not all filings are covered by these extensions. The information returns in the W-2, 1094, 1095, 1097, 1098, and 1099 series are still due. As are Form 1042-S, 3921, 3922, or 8027 and Employment and Excise tax deposits. Penalties on those deposits due on or after September 7 and before September 22, 2020 can be abated as long as the tax deposits were made by September 22, 2020, according to the September 16, 2020 IRS press release.

For those that have experienced losses, not just expenses for evacuation, have the option of claiming disaster related casualty losses on their federal income tax return for the year the loss occurred or in the prior year. Those taxpayers in the affected areas claiming the disaster loss on the 2019 or 2020 tax years should make sure to write “Oregon – Wildfires and Straight-line Winds” in bold letters across the top of Form 4684, Casualties and Thefts. A reference to the disaster declaration number for FEMA is also appropriate on these returns. The disaster number is FEMA 4562. See Publication 547 for details or schedule an appointment with Kent Anderson Law Office for assistance.

By |Oct 2, 2020|Categories: Oregon Department of Revenue, Tax Law|Tags: , |

How to appeal a Notice of Deficiency from the Oregon Department of Revenue

Ignore a Notice of Deficiency at your own peril.

If your tax return is audited by the Oregon Department of Revenue, you will likely receive a Notice of Deficiency at the conclusion of the audit. The Notice of Deficiency summarizes changes that have been made to your tax return (or returns) and informs you of your options for appealing the Department’s decision. You have two options to request an administrative appeal of the Notice of Deficiency: you can submit a written protest or you can request an appeals conference. You must choose one or the other, and you must submit your appeal in writing within 30 days of the date on the notice.

A written protest should detail each of your objections to the audit changes, and may include additional documentation to support your arguments. When you submit a written protest, it will be considered by the same person who conducted the audit. In many ways, the written protest is like an extension of the audit. If you were not happy with the way the audit was handled, an appeals conference may be a better option.

An appeals conference is an informal meeting between you, the auditor, and a conference officer—a more senior Department of Revenue employee with substantial audit experience. The conference can be held in person or by phone, and you will have the opportunity to submit additional documentation to the conference officer. Although a conference gives you the opportunity to have a second opinion from an experienced Department of Revenue employee, you should take note—conference officers are not independent of the Department, which means that their decisions should not be considered objective or unbiased.

At the conclusion of the administrative appeal, or if no administrative appeal is made within 30 days of the date on the Notice of Deficiency, the Department will issue a Notice of Assessment. This notice is particularly important because it begins the 90-day period to appeal to the Oregon Tax Court. If you do not appeal within that time frame, the adjustments become final and your options for challenging the tax are very limited.

While considering whether to appeal to the Tax Court during the 90-day period following the Notice of Assessment, it is important to be aware of the Department’s collection activities during that time frame. Thirty days after the Notice of Assessment goes out, the Department will send a Notice and Demand to Pay. While this letter seems threatening, it is the next notice that you should watch out for. Thirty days after the Notice and Demand to Pay is sent (now 60 days after the Notice of Assessment) the Department will send a Distraint Warrant. This document authorizes the Department to garnish your wages or bank account, or potentially seize other assets, without further notice. It is important to understand that the Department could take these actions even before your appeal rights have expired.

If you receive a Notice of Deficiency or Notice of Assessment, or any other notice from the Department of Revenue, consult with an experienced tax attorney who understands the assessment and collection process and who will advocate on your behalf. If you do not take appropriate steps to respond to the Department’s notices, your assets are at risk. Be proactive, talk to a professional, and educate yourself about your rights as a taxpayer.

Tax Relief in Bankruptcy?

The 9th Circuit Bankruptcy Appellate Panel decided a case recently with important consequences for delinquent taxpayers. On December 17, 2015, the Bankruptcy Appellate Panel handed down a decision in United States v. Martin that may advance a thorny problem toward resolution by the U.S. Supreme Court. The ruling, although of an interim nature, stated that a document filed by the taxpayer, intended as a tax return, should be considered a tax return and thus a dischargeable debt in bankruptcy. Bankruptcy lawyers and their clients with late tax returns should be well pleased.

The facts of the case are fairly common. Kevin and Susan Martin only got around to filing some missing tax returns after the IRS began collection on some involuntary tax assessments. The late-filed tax returns increased the Martins’ tax liability in some years, and decreased it in at least one tax year. After waiting the two years required by 11 U.S.C. §523(a)(1)(B)(ii) before a tax debt from a late-filed return can be discharged, the Martins filed bankruptcy.

A dispute arose when the IRS did not agree that the Martins’ tax debt had been discharged in the bankruptcy proceeding. To resolve the matter, the Martins filed an adversary proceeding in the bankruptcy court against the IRS. They took this action without the benefit of counsel, on a pro se basis. Bankruptcy Judge Richard Lee, sitting in the Eastern District of California, agreed with the Martins and ruled the tax was dischargeable. It was a well-reasoned opinion by the bankruptcy court that harmonizes the statutory language with the legislative intent of Congress. The reasoning carefully balances the “fresh start” of the debtors against the financial interests of the government.

The IRS did not share my enthusiasm for Judge Lee’s determination and appealed to the Bankruptcy Appellate Panel for the 9th Circuit. With the full weight of the federal government and the U.S. Attorney’s office arrayed against them, one would think the Martins would hire counsel to represent them in the Appellate Court. However, their win in the Bankruptcy Court encouraged them to go it on their own. Their briefs are just that, brief, and verify the pro se nature of this case. In fact, the Martins orally argued the case themselves before the Appellate Panel. The Martins won another round and the Bankruptcy Appellate Panel came back with a wonderful 28 page opinion, mostly in their favor. On the most important issue, the dischargeability of tax on late filed returns, this was an important win for bankruptcy debtors with outstanding tax liability.

Three circuits previously reached the opposite conclusion, holding that late-filed tax returns are no longer considered tax returns for bankruptcy discharge purposes. In the first of these decisions, McCoy v. Mississippi State Tax Commission, the 5th Circuit Appellate Court determined a late-filed state tax return to be disqualified from discharge by the 2005 amendment to 11 U.S.C §523(a)—specifically, the language included as part of a hanging paragraph appended to that section stating:

For the purposes of this subsection, the term ‘return’ means a return that satisfies the requirements of applicable non-bankruptcy law (including applicable filing requirements).

The 5th Circuit in McCoy found a timely filing requirement in the Mississippi state law and disqualified the McCoys’ late-filed tax return from discharge using this language.

I have discussed McCoy and two subsequent cases, Fahey and Mallo, from the 1st and 10th Circuits respectively, in another article “Trouble With Tax Debt in Bankruptcy.”  With these three Circuit Court opinions, the trend has not been looking good for delinquent taxpayers. Only the 8th Circuit, with the Colsen case decided based on pre-2005 amendment law, holds that a late return can be discharged if it otherwise meets bankruptcy discharge criteria.

The Martin opinion, containing a comprehensive analysis of just why the McCoy, Fahey, and Mallo decisions are wrong, is only a Bankruptcy Appellate opinion[i].  As such, it does not carry the weight of an opinion from the 9th Circuit Court of Appeals.  Bankruptcy judges in the 9th Circuit generally follow Bankruptcy Appellate Panel opinions, and will likely enter discharges in accord with the Martin decision unless and until it is overturned.  That may be a long time in coming[ii].

The Martin opinion is interesting because the Bankruptcy Appellate Panel, after 28 pages of discussion, actually returned the case to the Bankruptcy Court for further findings[iii]. This is based on a prior 9th Circuit case, In Re: Hatton, that held the debtor’s behavior must be taken into consideration when determining if the papers filed constitute a tax return for discharge purposes. In that earlier case, the 9th Circuit decided that in the case of a late tax return, there was a good faith requirement.  Thus, in the 9th Circuit, the definition of a tax return includes a requirement that the document filed by the debtor be a reasonable attempt to comply with tax laws.

The Martins are not yet home free. Some of the delinquent tax returns were not filed until months after they were prepared, signed, and delivered by their accountant. To meet the good faith requirement, as expressed in Hatton, the debtors must convince the bankruptcy judge they had good reason for their delay in filing tax returns or, at least, had no improper motive.

More interesting than the remand issue is the fact that the decision of the Bankruptcy Appellate Panel is not yet appealable, because the remand order is not technically a final order. The ultimate decision on dischargeability will depend on findings of the bankruptcy court if the case is returned to the Bankruptcy Appellate Panel. Doubtless, this frustrates the Internal Revenue Service and may provide a window of opportunity for delinquent taxpayers to discharge their tax debts in the 9th Circuit.

[i] The Bankruptcy Appellate Panel (BAP) is composed of three bankruptcy judges. It is an optional avenue of appeal from a bankruptcy court decision and must be agreed upon by all parties to the appeal.  While persuasive, a BAP opinion is only clear binding authority in the specific case for which a decision is made.  The Court of Appeals is superior to the Bankruptcy court and its opinions are binding authority on all district courts and bankruptcy courts in the circuit.

[ii] The 9th Circuit Court of Appeals is currently considering a case with very similar facts. The euphoria over United States v. Martin could be short-lived if the 9th Circuit see the issue differently.

[iii] The BAP remanded the case to the bankruptcy judge for further findings. The record before the court on appeal contained no evidence on something the court considered an important issue.

Navigating Self-Directed IRAs: Steer Clear of Tax Penalties

Two men in a boat on a stormy sea. 1803 etching. Courtesy Wellcome Library, London. Wellcome Images images@wellcome.ac.uk http://wellcomeimages.org

Two men in a boat on a stormy sea. 1803 etching. Courtesy Wellcome Library, London. Wellcome Images.

Truth and Consequences
Do an internet search for self-directed IRA and you’ll find a number of promoters promising to give you complete control over your retirement accounts. Those promises may contain a grain of truth, but don’t let exaggerated claims capsize your retirement plan. It is true that by rolling over an existing IRA or 401(k) into a self-directed IRA, you can invest in assets not offered by most IRA providers. With a self-directed IRA, you can buy almost any type of asset: an interest in a start-up, a parcel of real estate, a patent, or precious metals. It’s also true that you can continue to defer tax on gains within the IRA. However, the rules governing self-directed IRAs contain important restrictions that you should understand before you set one up—make one wrong move and you could be looking at some serious tax consequences.

The Qualified Custodian
In order to establish a self-directed IRA, a qualified custodian must be used to hold the IRA assets, maintain records, file reports, and process transactions. The custodian must be a bank or an IRS approved non-bank trustee. (The IRS publishes a list of approved non-bank trustees on its website, available at http://www.irs.gov/Retirement-Plans/Approved-Nonbank-Trustees-and-Custodians). The role of the self-directed IRA custodian differs substantially from the role of conventional IRA custodians. The self-directed IRA custodian generally will not provide investment or tax advice, will not sell or recommend investment products, and will not perform due diligence to determine the suitability of any investments. The self-directed IRA account owner chooses where to invest and directs the custodian to execute each transaction.

Given the limited role of IRA custodians, the burden to maintain compliance with the laws and regulations that are applicable to all IRAs falls on the self-directed IRA account holder. Some of the most important requirements are found in Internal Revenue Code section 4975, which states that the IRA will lose its tax exempt status if the IRA engages in any prohibited transactions between the IRA and certain disqualified persons.

Disqualified Persons and Prohibited Transactions
The definition of disqualified person includes any fiduciary (such as the self-directed IRA account holder), certain members of the account holder’s family (including his spouse, ancestors, his descendants and their spouses), and business entities of which the IRA account holder owns 50 percent or more (either directly or indirectly). The IRA is prohibited from:

  • selling, exchanging, or leasing any property to a disqualified person;
  • lending money or extending credit to a disqualified person;
  • providing goods or services to a disqualified person;
  • allowing a disqualified person to use any income or assets of the IRA.

If it’s determined that a transaction is in fact prohibited, the account will cease to be a retirement account, resulting in a deemed distribution of the IRA funds, subject to taxation at ordinary rates, and possibly a 10 percent early withdrawal penalty as well. These provisions are designed to prevent any transaction that is not at arm’s length or that otherwise has the potential to harm the plan. In other words, the IRA account holder is not allowed to obtain any benefit from the IRA assets without first paying income tax. As a matter of policy, the tax favored status of IRAs is meant to encourage retirement savings and promote investment. Once any account assets are converted to personal use, the IRA is no longer a retirement account, and the IRS will expect taxes to be paid.

In some cases it won’t be entirely clear if a prohibited transaction has taken place, and the IRS may or may not decide to challenge the tax-deferred status of your IRA. The law in this area is unsettled and leaves some room for interpretation. This gives the IRS broad discretion to go after “suspicious” transactions. For example, a transaction may be prohibited even if disqualified persons are not directly involved. In one case, the United States Tax Court found that a prohibited transaction occurred when the taxpayer caused his retirement plan to lend money to three entities in which he owned a minority interest. Even though none of these entities were “disqualified persons,” the court found that the benefit to the account holder was substantial enough to violate the provisions of section 4975. See Rollins v. Comm’r, T.C. Memo 2004-260 (T.C. 2004). If you plan on using your self-directed IRA to transact business with any entity that you or any related person has an interest in, a careful analysis of the arrangement is required to ensure that it does not involve a prohibited transaction.

The Account Holder’s Burden and the Siren Song of Checkbook Control
Self-directed IRA owners must be aware of the prohibited transaction rules and other restrictions; the account custodian usually will not offer guidance as to whether a transaction is prohibited. From the perspective of the IRS, there is great potential for abuse built in to the structure of self-directed IRAs. Because taxpayers have greater control over the IRA assets and little oversight from IRA custodians, there is more opportunity for a taxpayer to benefit from the use of IRA assets without removing them from the account as part of a taxable distribution.

A relatively recent development involves the use of LLCs to give an IRA account holder checkbook control over the account assets. In order to do this, the IRA purchases a majority interest in the stock of an LLC for which the IRA account holder serves as general manager and has full authority to act on behalf of the company. The Tax Court has held that because the company does not have any membership interests when the investment is made, the company cannot be a “disqualified person” with respect to that transaction. However, if the IRA account holder receives any money or other assets from the company—whether it be a salary, loan, gift, or commission—that will be considered a prohibited transaction. See Ellis v. Comm’r, T.C. Memo 2013-245 (T.C. 2013), affirmed by Ellis v. Comm’r, 787 F.3d 1213, 1215 n.4 (8th Cir. 2015).

The idea of checkbook control is appealing to many investors, since it provides direct access to the IRA funds without having to go through the account custodian to execute transactions. In theory, the IRA account holder can do as he pleases and manage the day-to-day operations of a company that is wholly owned by his self-directed IRA. In practice, an IRA LLC can be extremely risky, even for sophisticated investors. There is little case law discussing the use of IRA LLCs, so investors must be wary of engaging in activities that could fall under the category of prohibited transactions. Though many online promoters will tell you that an IRA LLC provides you with unlimited investment opportunities, you’ll be hard pressed to find one that can offer a sound legal opinion to confirm that your investment plan meets the requirements of the Internal Revenue Code. These types of arrangements are on the IRS’s watch list, and more vigorous enforcement efforts could be lurking just beyond the horizon.

For the more adventurous investor with sufficient time, energy, and know-how, a self-directed IRA can be a good idea. If you are interested in setting one up, or already have one in place, consult with a tax attorney who knows how to avoid prohibited transactions. As you start researching assets, your attorney can also help you evaluate the legitimacy of investments that aren’t regulated by the SEC or state securities agencies. As the captain of your self-directed IRA, you are ultimately responsible for its success or failure. If you decide to take the helm without a skilled navigator at your side, be prepared to go down with your ship.

Employer Alert: Take Care To Avoid ACA Pitfalls

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If you are an employer, you’re aware of the confusion surrounding the implementation of the Affordable Care Act (ACA). While many of the ACA’s provisions apply only to large employers (those with 50 or more full-time equivalent employees), the Act is filled with traps for the unwary small employer as well.

One area of concern for small employers involves the broad definition of “group health plan” under IRC 9832(a). By reference to IRC 5000(b)(1), the definition of a “group health plan” includes any plan of, or contributed to by, an employer to provide health care to employees. Common employer sponsored reimbursement plans such as Health Reimbursement Arrangements (HRAs), Employer Payment Plans (EPPs), and Flexible Spending Accounts (FSAs) all fall under this definition. It’s important to note that these types of plans may overlap, so employers must use caution regardless of the type of reimbursement arrangement they have in place.

An HRA is a reimbursement arrangement funded solely by an employer to pay for employees’ qualified medical expenses, which may or may not include health insurance premiums. Employees cannot make pre-tax contributions to an HRA. Employee Payment Plans are a specific type of HRA that have been incentivized by the IRS for over 50 years. Rather than provide expensive, difficult to administer group health coverage to employees, many small employers have used EPPs to reimburse their employees for individually purchased health insurance policies. Revenue Ruling 61-146 provides that a reimbursement under an EPP is excluded from the employee’s gross income. The exclusion also applies if an employer pays employee health insurance premiums directly to the healthcare provider. The Revenue Ruling remains in effect and employees are still eligible to receive tax-free reimbursements for health insurance. But employers beware: the employee exclusion for the reimbursement comes at a high cost for the business.

IRC Section 4980D provides that an employer operating a noncomplying group health plan after January 1, 2014, must pay a tax in the amount of $100 per day for each employee covered by the noncomplying plan. Small employers are not exempt from this penalty. IRS Notice 2013-54 provides some guidance on the treatment of employer reimbursement policies. Because an HRA is considered a group health plan under IRC 9832(a), it must comply with the ACA’s market reforms, including sections 2711 and 2713 of the Public Health Services Act. Section 2711 provides that a group health plan may not establish any annual limit on the dollar amount of benefits for any individual, and Section 2713 requires that a group health plan provide coverage for certain preventive services without cost sharing. Like other Health Reimbursement Arrangements, EPPs are considered group health plans that must comply with the ACA market reforms. Under Notice 2013-54, EPPs violate the ACA’s prohibition on dollar limits because the plan benefit is deemed to be only the amount of the premium paid by the employer. Even though employees may be entitled to unlimited benefits under their individual policies, the Notice states that the EPP cannot be integrated with an individual health insurance policy. Thus, an employer who reimburses employees for individual health insurance policies is subject to the $100 per day per employee penalty.

If certain requirements are met, an employer’s payroll practices of forwarding post-tax employee wages to a health insurance provider is not considered a group health plan that is subject to the market reforms. Under this type of arrangement, no contributions can be made by the employer or any employee organization, participation in the plan must be voluntary, and the employer can receive no benefit from the program (See 29 C.F.R. §2510.3-1(j)). If an employer wishes to provide these services to employees, great care should be taken to insure that the requirements are met so that the employer does not inadvertently establish a group health plan.

Although the ACA provides that the 4980D penalty applies to non-complying group health plans after January 1, 2014, the IRS has offered limited transition relief for reimbursement plans that are not in compliance with the market reforms. Notice 2015-17 provides that small employers offering EPPs will not be subject to the penalty, at least through June 30, 2015. The Notice encourages small employers to look for group health coverage in the Small Business Health Options Program (SHOP) Marketplace, and warns that the 4980D penalty may apply beginning July 1, 2015. Republican lawmakers in the House and Senate recently introduced legislation, known as the Small Business Healthcare Relief Act, that would allow small employers to continue using pre-tax dollars to reimburse employees for health insurance premiums, but it’s far from certain that the bill will be signed into law. For the moment, employers should be on notice: reimbursement plans that were once common could result in large penalties.  If you are a small employer offering any type of “group health plan” as defined by the Affordable Care Act, you should contact your tax professional today to make sure that you are in compliance.

By |Jul 31, 2015|Categories: Tax Law|Tags: |

Ninth Circuit Denies Deductions For Marijuana Businesses

marijuana-sign-thOregon has joined the growing list of states that have legalized the sale of marijuana, but that doesn’t mean pot dealers can light up and relax. Marijuana sales may be legal in the state, but it is firmly established that Internal Revenue Code Section 280E prohibits taxpayers from deducting any expenses of a trade or business that consists of trafficking in controlled substances.

Make no mistake, marijuana is a controlled substance under federal law. This means that Oregon marijuana businesses will be forced to pay federal income tax on 100 percent of their gross profits. Unless you can classify your expenses as Costs of Goods Sold (COGS), deductions for payroll, utilities, advertising, and miscellaneous expenses will be disallowed in full. Last week, the U.S. Court of Appeals for the Ninth Circuit made clear that Section 280E applies even in states that have legalized marijuana, either for medical or recreational use.

The case, Olive v. Commissioner of Internal Revenue, No. 13-70510 (July 9, 2015), involved a medical marijuana dispensary in San Francisco called the Vapor Room. Although 100 percent of the Vapor Room’s gross income came from marijuana sales, the business also offered a variety of other goods and services at no cost. Customers could enjoy free movies, yoga, and massage therapy, as well as complementary drinks and snacks. Vapor Room staff also provided free counseling to customers on personal, legal, and health matters. The dispensary wanted to deduct not only these expenses, but also the expenses that could be directly attributed to marijuana sales.

But, because the Vapor Room’s only source of income came from marijuana sales, the court found that trafficking in a controlled substance was its only “trade or business” and disallowed all deductions for expenses incurred in its operations. Expenses for the benign, completely legal perks (like pizza and yoga) were held to be non-deductible under Section 280E because they were designed to benefit the marijuana sales business as inducements for potential customers.

This result might seem harsh, but the Ninth Circuit offered some useful guidance in its approval of a well-known 2007 Tax Court case, Californians Helping To Alleviate Medical Problems, Inc., v. Commissioner, 128 T.C. 14 (2007) (CHAMP). In that case, the court acknowledged that the taxpayer had more than one trade or business and was allowed to allocate expenses between the two. Expenses incurred in the course of care-giving (the taxpayer’s primary trade or business) were clearly deductible. All expenses attributable to the trade or business of selling marijuana, however, were disallowed. Taxpayer CHAMP, of course, charged a fee for its care-giving services and intended to make a profit from those activities. Had the Vapor Room followed suit and asked its customers to pay for the munchies, at least some of its expenses could have been deductible.

Oregon marijuana businesses take heed: If you operate a business that sells marijuana, but also offers other goods or services, work with your accountant and your tax attorney to establish the existence of a non-trafficking “trade or business.” Careful accounting procedures and appropriate business structures must be put in place to allocate expenses between the trade or business of trafficking in marijuana and any other trade or business you operate, such as care-giving or selling marijuana accessories. Without these safeguards, you put yourself at the mercy of IRS auditors who will be all too eager to allocate your expenses for you. If you are proactive, you may be able avoid the fate of the Vapor Room, which was hit with a $1.9 million tax bill as a result of inadequate planning and sloppy bookkeeping.

There is a faint glimmer of hope for the “cannabusiness” community: Oregon’s U.S. Representative Earl Blumenauer recently introduced a bill that would reverse the draconian effects of Section 280E in states that have legalized marijuana. The bill, known as The Small Business Tax Equity Act, is co-sponsored in the Senate by Oregon’s own Ron Wyden and Jeff Merkley. To date, twenty-three states and the District of Columbia have legalized medical marijuana. Voters in Colorado, Washington, Oregon and Alaska have passed measures legalizing recreational marijuana, and more states are lining up to do the same. Even so, it’s doubtful that our esteemed legislators will succeed in maneuvering the Small Business Tax Equity Act through the House and Senate, at least in the foreseeable future. In the meantime, Oregon marijuana businesses should plan for Section 280E. Contact your tax attorney to discuss steps you can take to minimize the impact of Section 280E and protect every deduction you’re entitled to.