DENVER, CO – MARCH 27: A grow light shines through the leaves of a cannabis plant at Northern Lights grow facility in Denver, Colorado on March 27, 2014. The retail marijuana business has been booming in Edgewater. No crime or problems have been reported to police by retail marijuana businesses since legal recreational sales began on January 1st. (THE DENVER POST | Seth McConnell)The Internal Revenue Service has backed away from a policy that penalized an unbanked marijuana business in Denver for paying taxes in cash, but the federal agency will not say if the approach applies industry-wide.In a settlement with Denver-based Allgreens, a medical-marijuana dispensary that challenged the agency over its policy, the IRS said it would abate future penalties and will refund about $25,000 in fines the business was forced to pay despite having paid its federal employment withholding on time.IRS rules require businesses to pay employee withholding electronically or face a 10 percent penalty for cash payments. Although the IRS allows for an abeyance in certain circumstances, it disagreed with Allgreens’ position that an inability to get banking services forced it to pay in cash.The company filed a petition in U.S. Tax Court challenging the penalty saying it was unfairly applied to a business that was otherwise compliant and paid the taxes in full and on time.A spokeswoman for the IRS refused to comment on the settlement or its ramifications.It remains unclear whether the IRS’s settlement will extend to numerous other marijuana businesses that have been assessed the cash-payment penalty because they could not obtain banking services.Allgreens’ attorney, Rachel Gillette, said it’s possible — even likely — other impacted marijuana businesses could benefit.”If this had gone through to a successful verdict in court, it would be a precedent, but this is a concession and an agreement (the IRS) will abate penalties to those who pay in cash and don’t have access to the payments system,” Gillette said. “Not applying (the penalty) to other businesses uniformly would be as ludicrous as having applied it in the first place.”Gillette successfully argued that the policy was intended for businesses that refused to be compliant, not as punishment for those that paid on time, yet were forced to bring a briefcase full of cash to the one Denver IRS office that would accept in-person payments.The IRS told Allgreens that companies have two alternatives to pay electronically — each of … – Click Here To Visit Article Source