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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.
IRS Should Be Asking For Cooperation Not Volunteering
Professor Manhire presents a four cell quadrant that illustrates the choices available to taxpayers – cooperate or evade – and the IRS – audit or don’t audit. He notes that the ideal situation is one in which the taxpayer cooperates and the IRS does not audit at all or at least not very often is the ideal. Lots of audits of compliant taxpayers feels like harassment. Audits of non-compliant taxpayers will have them “busted” which is unpleasant, whereas non-compliant taxpayers not being audited make the rest of us feel like chumps.
So it would be less confusing if the IRS were to say that the system is based on “cooperative compliance”. Since most people cooperate, enforcement resources can focus on those that do not. It actually sounds like a pretty good idea. We’ll see if it takes off.
Too Much Assuming Leads To Over Quarter Million Late File Penalty
I think that the result in this case is rather harsh. Given how compliant the taxpayers were once they got their act together, I think the government should have been satisfied with the late pay penalty. The problem would have been easily avoided if they had been more proactive in communicating with their professionals and if the professionals had been communicating with one another. You can’t tell from the decision why the proactivity was not happening. There may have been an understandable desire to minimize fees. If that is the case it was kind of a penny wise, pound foolish result.
I think that you could use this case as an object lesson in why you might want to consider involving a professional as at least a co-executor, if you have a significant estate. At any rate, you should try to arrange things so that your advisers and heirs/executors will work as a team.
Massachusetts Hits Staples For $10 Million On Sham Interest Deductions
The cause might have been hopeless, but some attention to detail might have helped. This case makes me wonder how solid many other corporate tax schemes would turn out to be if subject to much in the way of scrutiny. Accountants tend to think that journal entries are deeply meaningful, but it seems that whenever they are tested in court, judges are dismissive of “mere bookkeeping entries”.
Irwin Schiff Famed Tax Protester Dies In Prison
When I first encountered Schiff’s arguments in the nineties I was so impressed by how well put together they were, that I found it difficult to believe that they were constructed by someone who believed them, as citations always checked out, but were wildly out of context. Irwin, however, has proved his sincerity. That doesn’t make his arguments right, but it does merit some grudging admiration.
I was sad that Peter Schiff was not able to bring his father home for his last days,
Montana Court Rules For And Against Online Travel Companies
It strikes me that this particular dispute illustrates one of the downsides of federalism,. The same issue is being fought all over the country with disparate results. It may be the type of thing that it would pay to have some sort of uniform law on. I have not found anything going on in that area, but I would be happy if one of my commenters embarrassed me on that.
Why Don’t We Eliminate The Charitable And Mortgage Interest Deductions?
The only two things I will eliminate are the charitable contribution and the mortgage interest deduction. The reason I picked them is because in most, if not all, of the Republican plans, those are the only two itemized deductions that are kept. Frankly if you blew those away, I think you would end up with a lot of non-itemizers, except in the high tax states, but let the chips fall where they may.
Santorum 20/20 Flat Tax Might Be Hard On Many Small Businesses
A progressive rate table may be a good or bad idea, but it is really not that complicated. Even if you are doing a return by hand figuring out the tax on a progressive table once you have gotten to taxable income could be turned over to a bright fourth grader. Boiling the 29 line Schedule A down to 2 lines might seem like a massive reduction in complexity, but all the various Code Sections that address potentially abusive transaction will need to stay in some form or other and you will still need special provisions for insurance companies and financial institutions. So the page count will not come down all that much, but the page count is not a real problem, since nobody is affected by all the pages and regular people only have to worry about a few of them
A Twisted Tale Of New Jersey Use Tax
On this audit the state took the position that J&J needed to pay use tax on all the parts used to assemble warmers regardless of where they are sent. New Jersey was thus demanding use tax on pieces of metal, plastic and glass that were in the state for a couple of days being assembled into a warmer that went to another state.