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Marijuana may be illegal on a federal level, but you've still got to pay your taxes. "Remember what got Al Capone," said Jim Marty, a certified public accountant in Colorado.
On Thursday, an advisory council for the IRS recommended that tax professionals who help state-recognized, legal marijuana businesses "will not be considered unethical, will not be targeted for audit," or otherwise penalized simply because pot is illegal under federal law.
The tax agency estimates that legal recreational cannabis businesses in Colorado will gross $1 billion this year. Its report said some tax preparers in that state are concerned they could lose their federal licenses by working with such enterprises. "Tax professionals who give that advice need assurance that they will not be adversely affected by the fact that the business is illegal under federal law."
However, pot stores will still be treated differently from most other retailers in one important way—they won't have nearly as many deductions for retail expenses. "This can put some dispensaries in a tax rate of over 100 percent," said Marty. "This is not a sustainable business model."
Marty has been an outspoken accountant for the industry in Colorado after starting to provide tax help on the medical marijuana side five years ago. Pot professionals make up about 10 percent of his overall client base— "This is a fast-growing part of my practice." He said most of these new business owners are in special need of tax help because they are often under the age of 40 and dealing with tens of millions of dollars in sales.
Since this remains a mostly all-cash industry because banks are still reluctant to allow checking or savings accounts, taxes are usually paid in cash (which the state or IRS immediately puts in the bank anyway). "It is very inconvenient to pay your payroll and other bills in cash, it takes hours and hours," said Marty. "This industry craves to have a checking account. That is all they want ... a checking account."
Read MoreSolving marijuana's banking problem
It does not appear that any tax preparers have gotten in trouble over the years merely for working with a legal marijuana business, but CPA groups have been talking with federal officials about providing some sort of formal protection.
Marty said it will be up to the IRS commissioner now to act on the recommendation. "This is a situation where the IRS and the federal and state governments need us accountants."
And he added there is one interesting upside for ganjapreneurs who may be filing their first business tax returns in 2015. "Surprisingly, all the cost of growing the plant are deductible."