With latest ruling, IRS threatens to crush the whole medical marijuana industry

[Amerigo Vespucci]

With latest ruling, IRS threatens to crush the whole medical marijuana industry

http://www.rawstory.com/rs/2011/10/05/with-latest-ruling-irs-threatens-to-crush-the-whole-medical-marijuana-industry/

By Stephen C. Webster
Wednesday, October 5, 2011



The Internal Revenue Service (IRS) is on the verge of shutting down California’s largest medical marijuana dispensary, and with it potentially the entire semi-legal pot industry.

The Harborside Health Center in Oakland — which was going to be the subject of a Discovery Channel reality show called “Weed Wars” — now owes the IRS $2.5 million in back taxes, thanks to the recent enforcement of a federal law that prohibits organizations that traffic in “controlled substances” from taking tax deductions.

Those deductions, for things like payroll, workers’ compensation insurance and the like, were taken by Harborside in 2007 and 2008, meaning they owe significantly over the roughly $500,000 Harborside paid in federal taxes both years. Harborside also paid the city of Oakland about $1.1 million and the state of California another $2 million. Just last week owner Steve DeAngelo presented the city with another $360,483 tax payment, and even sent out a press release about it.

DeAngelo was quick to tell reporters that he will likely appeal the ruling, although his tax bill could grow exponentially once the IRS completes audits of his 2009 and 2010 filings.

[YellowCosmicSun]

1. This will not stop anything. People will just lie on their taxes.

Way to make an industry that was trying to be honest act like everyone else, Mr. IRS.

[msongs]

3. businesses have a harder time lying than individuals and you can bet they will be audited to support

the police state.

[jdlh8894]

2. "Semi-legal"??

Please explain.

[Warpy]

4. The whole drug war is based on tax law

which is something a lot of people seem to forget. They'd have needed a constitutional amendment to wage it on its own dubious merits.

Of course the IRS ruled this way. They couldn't rule any other way and manage to keep the rest of the shaky edifice from tottering and falling to pieces.

[fascisthunter]

5. hahaha... whatever. They will fail in the end

this movement is too large for them to stop.

[krabigirl]

6. Yep.

[fascisthunter]

7. every time they try they add fuel to this fire

I welcome their hatred.

[kestrel91316]

8. Fine. People will just grow their own.