Marijuana Dispensary Sues IRS Over Cash-Only Rule

A medical marijuana dispensary in Colorado is challenging the Internal Revenue Service’s policy of charging extra fees to companies that pay taxes in cash.

Allgreens, a dispensary in Denver, filed a lawsuit against the IRS this week because the agency assesses a 10% penalty on businesses that pay their federal employee withholding taxes in cash, according to the Denver Post.

The lawsuit argues that the policy is unfair, given that Allgreens and other marijuana businesses are not able to open bank accounts due to the federal prohibition on marijuana.

The IRS has previously advised the companies to avoid the 10% charge by funneling cash to a third party that can then make the tax payments on their behalf. But Allgreens’ lawyer, Rachel Gillette, argues that this method amounts to illegal money laundering.

Allgreens was able to pay its taxes electronically until 2012, when the company’s bank closed its account. Since then, the business has hand-delivered tax payments twice a month to the IRS office in Denver., according to the Post. Each payment requires an appointment, and the process often takes the majority of a day to complete.

As a result, the IRS says Allgreens owes more than $20,000 in penalties from December 2012 through December 2013. The agency has filed a lien against the business.

5 comments on “Marijuana Dispensary Sues IRS Over Cash-Only Rule
  1. DrJoshua on

    Somehow this may be big for the company “American Green” and their cannabis vending machine. American Green is traded on the stock market as ERBB.

    Their vending is state compliant, keeps records, checks id, records inventory,keeps track of sales for taxes, etc.

    Reply
  2. noah on

    The IRS sounds very similar to Al Capone.

    The first income tax was assessed in 1862 to raise funds for the American Civil War, with a rate of 3%. Today the IRS collects over $2.4 trillion each tax year from around 234 million tax returns…. hmmmmm

    Reply

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