Marijuana is illegal under federal law, should IRS be able to collect taxes on Colorado pot sales?

Fox 6 Now ^ | 7/05/14

[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.

[a fool in paradise]

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

[jiggyboy]

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...”

[nothingnew]

bfl

FMCDH(BITS)

[alexander_busek]

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,

[alexander_busek]

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.

[alexander_busek]

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,

[alexander_busek]

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,

[alexander_busek]

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,

[alexander_busek]

“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,

[trebb]

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...

[Wolfie]

We’re not for States Rights around here unless we agree with what the State is doing.

[a fool in paradise]

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

Wasn't the radio payola scandal originally over unreported "earnings"?

[celmak]

It was a rhetorical question.

[FBD]

People are allowed in most states to brew beer and distill spirits for personal consumption, without taxation. Are you opposed to that?

[Pete from Shawnee Mission]

Actually, I thought that tobacco assisted in Ideation. I smoked for a couple of months when I was 15. I remember the out of body feeling I received when I smoked....the top of my head would dissolve, my mind would float over me...a wonderful euphoric feeling!

I, however, started coughing up green stuff and caught pneumonia and decided my body was not made to smoke.

As far as the other stuff is concerned I wish I never touched it. Ruined my early life. My cousin also used it, she moved on to the streets, on to heroin, and died of an overdose at 17. If your experience was/is different I am glad. Regards!

[Pete from Shawnee Mission]

Actually they do pay taxes on the malt syrup or barley, the hops, brewing supplies. Just not the end product because its not being sold, just consumed.

The marijuana, however, is being sold in a store, presumably for profit.