Under the federal Controlled Substances Act, Marijuana is a “controlled substance.” The United State Supreme Court has held that “no exception in the Controlled Substances Act exists for marijuana that is medically necessary.” Or, for recreational use for that matter.
IRS Code Section 280E “prohibits taxpayers from deducting any expense of a trade or business that consists of the trafficking of a controlled substance such as marijuana.” The controlled substance status also makes it difficult or impossible for Cannabis business to get a bank account. Forcing these business to deal in cash.
There have been efforts to ease the prohibition And, with the recent IRS push to track every dollar in and out of every bank account, the Secretary of the United States Treasury Department, Janet Yellen, has voiced her support to change IRS rules to allow Cannabis businesses access the banking system in an effort to “make the IRS job easier.”
Attorney Steven A. Leahy reports on the latest IRS related cannabis news.
Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649