God May Bless Your Pot Shop – Tax Court Not So Much
Unless you can figure out a way to combine high margins and low operating expenses Section 280E will kill a business or force it underground. Of course probably when TEFRA was passed in 1982, all illegal drug businesses were underground. Presumably the legislation comes from the “That’s how they got Al Capone” syndrome reflecting a desire to use the tax law as one more weapon in the War on Drugs. Nancy Reagan, notwithstanding, people were often saying yes, rather than just saying no. Unanticipated was the “kind of legal in some places” status of marijuana that our federal system has evolved.
The decision was pretty cut and dried. an illustration of Reilly’s First Law of Tax Planning – It is what it is. Deal with it. There are three elements to make Section 280E applicable. There is a trade or business. There is trafficking. There is a controlled substance.
No Orange Jumpsuit For Lois Lerner
I think that politically this decision might actually break in favor of conservatives who have adopted the scandal narrative as a matter of faith. An actual prosecution of Lois Lerner would make for an epic trial in which her defense would put the whole question of “dark money” flooding into the political system on trial. Right now, there does not seem to be anybody who likes her very much, but a trial could turn her into a martyr for the cause of transparency. Instead this decision by DOJ will become one more strand in the scandal narrative. Republican candidates can compete on how vigorous they will be in ordering DOJ to reopen its investigation.
Follow Me
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.