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Marijuana is illegal under federal law, should IRS be able to collect taxes on Colorado pot sales?
Fox 6 Now ^ | 7/05/14

Posted on 07/05/2014 5:43:33 PM PDT by Libloather

(CNN) — Some Colorado marijuana sellers are challenging Uncle Sam. They’re filing a lawsuit — saying the IRS shouldn’t be allowed to collect taxes on marijuana sales because marijuana is illegal under federal law.

Attorney Rob Corry says forcing Colorado’s recreational marijuana businesses to pay violates the United States Constitution.

He has filed a lawsuit in District Court on behalf of clients, some of whom say taxes could be used as evidence in any future prosecution.

“They’re open records and they are admitting to a federal crime. It’s still a federal crime to sell marijuana,” Corry said.

(Excerpt) Read more at fox6now.com ...


TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: alcapone; cannabis; colorado; dopersrights; irs; marijuana; pot; taxes; taxthehelloutofit; temperancemovement; whytheycallitdope; wod
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If you were running guns during 'Fast and Furious', would you file?
1 posted on 07/05/2014 5:43:33 PM PDT by Libloather
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To: Libloather

Seems to me that taxation was one of the main selling points of the pro legalization crowd.


2 posted on 07/05/2014 5:45:08 PM PDT by cripplecreek (Remember the River Raisin.)
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To: Libloather
The supremes have already spoken to this, I think. The IRS is like honey badger. He don't care where the taxes come from. He wants 'em.

I believe you have to declare income on unlawful activities.

/johnny

3 posted on 07/05/2014 5:46:28 PM PDT by JRandomFreeper (Gone Galt)
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To: Libloather

if its income you must declare it, illegal or legal. How do you think they put Al C. in jail.


4 posted on 07/05/2014 5:46:57 PM PDT by cynicalman
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To: cynicalman

“”if its income you must declare it, illegal or legal. How do you think they put Al C. in jail.””

Yup.


5 posted on 07/05/2014 5:48:22 PM PDT by wrench
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To: cynicalman

Yup!


6 posted on 07/05/2014 5:48:51 PM PDT by shove_it (long ago Orwell and Rand warned us of Obama's America)
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To: cynicalman

I was thinking of Al Capone, too.


7 posted on 07/05/2014 5:49:24 PM PDT by gusopol3
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To: shove_it

Brilliant!


8 posted on 07/05/2014 5:49:33 PM PDT by shove_it (long ago Orwell and Rand warned us of Obama's America)
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To: Libloather
Since selling mj is still a federal crime, banks in CO refused to do business with the sellers, due to fear of being charged with money laundering.

Even with the Just-Us department's "operation choke point" which targeted "shady" but legal industries, like porn, firearms, and payday loans, Holder ordered his minions NOT to go after the dispensaries, so they could use banks for their funds.

Yet another example of a completely lawless regime.

Mark

9 posted on 07/05/2014 5:51:32 PM PDT by MarkL (Do I really look like a guy with a plan?)
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To: Libloather

extortion and robbery are also illegal, but the government still expects taxes to be paid on income from them.

(seriously)

That’s how they got Al Capone - tax evasion.


10 posted on 07/05/2014 5:51:32 PM PDT by Mr. K (Palin/Cruz 2016)
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To: Libloather

No, but under current law they could get the shop owners under RICO laws (I think), however with the selective enforcement this isn’t likely.


11 posted on 07/05/2014 5:53:25 PM PDT by JSDude1
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To: Libloather

So how did they get Capone?


12 posted on 07/05/2014 5:57:17 PM PDT by celmak
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To: Libloather

Huh? Since when does the law matter to THIS Federal government??


13 posted on 07/05/2014 6:01:23 PM PDT by EagleUSA
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To: Libloather

Gotta love the Federal courts. States pass laws contrary to existing Federal drug laws and there is no problem. Let a state try to pass a law that protects even a viable fetus and that law is voided by those ever diligent judges before the ink dries.


14 posted on 07/05/2014 6:03:32 PM PDT by allendale
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To: Libloather

LOL LOL

“Income” is from whatever source derived

the sellers and attorney must be smoking something or maybe it’s the 39% federal tax rate they don’t like


15 posted on 07/05/2014 6:04:10 PM PDT by Selene
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To: Libloather

Heck, the president breaks the law everyday, he still files his taxes, why should his base be any different?

It is fraud not to declare income. It doesn’t matter if its from prostitution, drugs, bank robbery, fraud, bribery, or grifting, it is illegal not to declare it.

So yes, if you are going to sell something illegal that makes people unmotivated, mentally confused, more liable to depression and schizophrenia, and lung cancer, the sellers should pay taxes.


16 posted on 07/05/2014 6:05:26 PM PDT by Pete from Shawnee Mission
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To: Libloather

If you declared bankruptcy the IRS will tax you on the money you owed and couldn’t pay saying it’s a monetary gain.


17 posted on 07/05/2014 6:05:26 PM PDT by SkyDancer (If you don't read the newspapers you are uninformed. If you do read newspapers you are misinformed)
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To: Libloather

You are required to report ALL income, legal or illegal. That is how they got Dillinger.


18 posted on 07/05/2014 6:08:18 PM PDT by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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To: Libloather

I mean Capone.


19 posted on 07/05/2014 6:09:16 PM PDT by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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To: cripplecreek

Not federal taxation.


20 posted on 07/05/2014 6:10:02 PM PDT by steve86 ( Acerbic by nature, not nurture)
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To: Libloather

IIRC, they brought illegal income under the taxation umbrella as a way to catch gangsters in the Capone era. If they couldn’t catch them for the actual crimes, they could get them on tax evasion.


21 posted on 07/05/2014 6:10:51 PM PDT by Still Thinking (Freedom is NOT a loophole!)
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To: Blood of Tyrants
You are required to report ALL income, legal or illegal. That is how they got Dillinger.

That's how the got Capone. They got Dillinger with a hail of lead.

22 posted on 07/05/2014 6:11:04 PM PDT by okie01 (The Mainstream Media: Ignorance on parade.)
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To: Libloather

Didn’t they finally get Capone for not paying taxes on his illegal earnings?


23 posted on 07/05/2014 6:13:18 PM PDT by Proud2BeRight
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To: Libloather

What a shame to see those dope dealers and pushers jailed for tax evasion. LOL


24 posted on 07/05/2014 6:16:06 PM PDT by Proud2BeRight
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To: Libloather

I expect an Executive Order any day making it legal all around the world!!


25 posted on 07/05/2014 6:16:19 PM PDT by Sacajaweau
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To: JRandomFreeper

I was thinking the Supremes would just call it a “penalty” and move on...


26 posted on 07/05/2014 6:26:17 PM PDT by gov_bean_ counter (Romans 1:22 Professing themselves to be wise, they became fools)
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To: JRandomFreeper

“I believe you have to declare income on unlawful activities.”

Al Capone could confirm this.


27 posted on 07/05/2014 6:26:44 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: okie01

“They got Dillinger with a hail of lead.”

Most people don’t know that the Feds managed to waste a couple of innocent bystanders with that little operation.


28 posted on 07/05/2014 6:28:10 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: cynicalman
How do you think they put Al C. in jail.

Likewise for various state and local politicians on the take. The Feds got them for not paying income tax on the bribes and kickbacks.

29 posted on 07/05/2014 6:38:38 PM PDT by omega4412
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To: cripplecreek
Perhaps these “retailers” could drop the corporate status and reorganize as nonprofits.

No profits would mean no taxes on profits.

But then, what would be the incentive to stay in business?

Hmmm... Interesting.

30 posted on 07/05/2014 6:49:28 PM PDT by DarthFuzball ("Life is full of little surprises." - Pandora)
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To: Lurker
Most people don’t know that the Feds managed to waste a couple of innocent bystanders with that little operation.

Are you familiar with the Kansas City Union Station Massacre?

I think the final body count was five -- four LEOs and the one criminal who was already in custody. All by "friendly fire". The three perps unleashed a hail of lead, but hit nary a thing -- except the façade of the train station (the bulletmarks are still there).

Fascinating case, trying to sort thru what really happened.

31 posted on 07/05/2014 7:00:46 PM PDT by okie01 (The Mainstream Media: Ignorance on parade.)
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To: Libloather; All
While I appreciate the logic of Attorney Rob Corry concerning federal taxes on marijuana, it is unnecessarily strained imo. Mr. Corry probably got indoctrinated with the unreasonably wide interpretation of Congress's Commerce Clause powers by FDR's activist justices in law school and must struggle to defend his stance on the constitutionality of some issues.

First, as referenced in related threads, please consider the following.

FR: Never Accept the Premise of Your Opponent’s Argument

In a nutshell, the regardless what FDR's Constitutution-ignoring activist justices wanted everbody to think about the scope of Congress's Commerce Clause powers in Wickard v. Filburn, the Supreme Court had arleady historically clarified the following about the federal government's constitutionally limited powers:

Note that all the statements above are substantiated below by excerpts from Supreme Court case opinions. Also note that the last excerpt includes the statement about intrastate agriculture as well as powers prohibited to the feds.

As a side note concerning the federal government's constitutionally limited powers, please consider the folloiwng. The states would sure be a dull, boring place to grow up and live in if parents were to make sure that their children were taught about the federal government's constitutionally limited powers. /sarc

32 posted on 07/05/2014 7:02:44 PM PDT by Amendment10
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To: cripplecreek

The IRS has been sending tax bills to marijuana traffickers for years and years-legality of the substance is irrelevant.


33 posted on 07/05/2014 7:07:43 PM PDT by Spok ("What're you going to believe-me or your own eyes?" -Marx (Groucho))
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To: Libloather

That is how the feds busted Al Capone.

For not paying taxes on his ill gotten gains he was sent to prison for tax evasion.


34 posted on 07/05/2014 7:29:05 PM PDT by Iron Munro (The Obamas Black skin has morphed into Teflon thanks to the Obama Media)
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To: Libloather

I hope they win, as this could further the push to repeal Amendment 64, which legalized and started this whole mess.


35 posted on 07/05/2014 7:39:00 PM PDT by Balding_Eagle (I am a citizen of an idea called America.)
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To: Libloather; GeronL; Slings and Arrows
Some Colorado marijuana sellers are challenging Uncle Sam. They’re filing a lawsuit — saying the IRS shouldn’t be allowed to collect taxes on marijuana sales because marijuana is illegal under federal law.

Obviously they never studied how mobsters are charged. The mob has a whole series of front organizations these days to launder their money so they don't get convicted on the tax avoidance charges.

36 posted on 07/05/2014 7:44:11 PM PDT by a fool in paradise (The new witchhunt: "Do you NOW, . . . or have you EVER , . . supported traditional marriage?")
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To: a fool in paradise

I didn’t know there was a federal sales tax (headline suggests)


37 posted on 07/05/2014 7:51:07 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Libloather
it's not really illegal, you just need the proper tax stamp...


38 posted on 07/05/2014 8:06:33 PM PDT by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
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To: Libloather

The IRS don’t care about legality. They want their cash.


39 posted on 07/05/2014 8:08:35 PM PDT by Organic Panic
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To: omega4412; cynicalman

I think they know that this is how they got Capone. The point here is, and the problem which has been pointed out many times by people of all political stripes is that filing a tax return declaring illegal income is a violation of the 5th amendment right against self incrimination. They say they made $1MM selling pot, pay $390,000 in taxes on it, and then 5 years later the feds could throw them in jail and have their own self-sworn and signed “admission” as evidence against them in trial.

I am sure that this fine point has also been adjudicated... but maybe if we are lucky we can get them to amend the tax form so that nothing written on it can be used to incriminate the filer for anything (or at least for anything other than tax evasion). Not posting this to say I agree with the tax scheme, just that this is the way it is.


40 posted on 07/05/2014 8:13:45 PM PDT by monkeyshine
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To: GeronL

Maybe not, but they’ll sure tax the profits as revenue.


41 posted on 07/05/2014 8:16:55 PM PDT by a fool in paradise (The new witchhunt: "Do you NOW, . . . or have you EVER , . . supported traditional marriage?")
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To: Libloather

Good luck. From the instructions for Form 1040:

“Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21...”


42 posted on 07/05/2014 8:59:09 PM PDT by jiggyboy
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To: Libloather
bfl

FMCDH(BITS)

43 posted on 07/05/2014 9:34:31 PM PDT by nothingnew (Hemmer and MacCullum are the worst on FNC)
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To: celmak
So how did they get Capone?

Wikipedia is your friend.

Seriously, I thought that literally everybody had seen that episode of "The Untouchables," with Robert Stack as Eliot Ness.

Regards,

44 posted on 07/05/2014 11:08:29 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: Pete from Shawnee Mission
So yes, if you are going to sell something illegal that makes people unmotivated, mentally confused, more liable to depression and schizophrenia, and lung cancer, the sellers should pay taxes.

Excuse me, but I thought that this article was about marijuana... not tobacco.*

Regards,

*Oh, right: For some reason, tobacco isn't illegal. And yes, I am aware that virtually everything you eat, smoke, drink, or do probably will increase your statistical chance of getting cancer, developing bad breath, or becoming a Democrat... I just don't think that that justifies Father State sticking his nose into my personal affairs.

45 posted on 07/05/2014 11:18:20 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: Lurker
Most people don’t know that the Feds managed to waste a couple of innocent bystanders with that little operation.

"Fortunately, it turned out that they were drug dealers."

-Frank Drebin, "Police Squad"

Regards,

46 posted on 07/05/2014 11:21:27 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: DarthFuzball
Perhaps these “retailers” could drop the corporate status and reorganize as nonprofits. No profits would mean no taxes on profits. But then, what would be the incentive to stay in business?

Like being a highly-paid, do-nothing member of the Board of Directives of a non-profit offers no incentives!

Just ask Chelsea Clinton!

Regards,

47 posted on 07/05/2014 11:25:12 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: Organic Panic
The IRS don’t care about legality. They want their cash.

Though if they can also intimidate, injure, slander, or otherwise harrass their political opponents - why, then that's just the icing on the cake!

Regards,

48 posted on 07/05/2014 11:29:57 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: jiggyboy
“Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21...”

And further: "You must enter the place where the body of your murder victim was dumped on line 21a... [Note: You hereby waive your rights under the Fifth Amendment.]"

Seriously: Does that mean that I can also deduct legitimate business expenses, like the cost of icepicks, bullets, gunney sacks, rope, cement, etc.? Will the IRS accept a receipt for breaking a deadbeat's legs signed "Vinny?"

Regards,

49 posted on 07/05/2014 11:36:00 PM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
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To: cripplecreek
Seems to me that taxation was one of the main selling points of the pro legalization crowd.

Yep - by the States that legalize it. Kind of ironic that the Feds, who thought they were being cute by not stopping the States from asserting their rights, might end up with egg on their faces over this. Whether one thinks it ought to be legal or not, I like the fact that States are making small inroads by telling the Feds to re-read the 10th...

50 posted on 07/06/2014 3:14:32 AM PDT by trebb (Where in the the hell has my country gone?)
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