IRS Taking Tough Stance Against MJ Businesses Without Bank Accounts

cannabis taxes

The Internal Revenue Service has no sympathy for marijuana companies that can’t find bank accounts, it seems.

An IRS hearing officer has rejected a Colorado dispensary’s request to waive a 10% penalty assessed on companies that don’t withhold employee taxes electronically, saying that the inability to find a bank account is no excuse, according to the Denver Post.

Denver medical marijuana dispensary Allgreens challenged the penalty in U.S. Tax Court, arguing that the charge is unfair because it can’t find a bank account given the reluctance of many financial institutions to work with the cannabis industry.

The dispensary argues that under IRS rules, such a penalty is only supposed to be levied if non-payment is “due to reasonable cause and not due to willful neglect.” But Allgreens has been trying to get a bank account for two years, without success, and so it has no way of complying with the rule.

Allgreens pays its taxes twice a month in cash at the Denver IRS office, according to the Post.

An attorney for the dispensary said the IRS has suggested methods of paying the required wire transfer that essentially equate to money laundering.

The case is still pending.

Daily News | Briefs | Dispensary/Retail Store Business News | Legal & Regulatory News for Marijuana Businesses | Sales, Funding & Banking News

 1 Comment

  1. bongstar420 February 17, 2015

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note: Comments are moderated by our editors who do their best to approve comments ASAP. As Marijuana Business Daily is focused on business, we approve comments that are specifically relevant to industry professionals. General opinions and questions about cannabis may not be posted.