Denver medical cannabis dispensary takes 280E appeal to Supreme Court

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A Colorado medical cannabis dispensary is asking the U.S. Supreme Court to review a lower-court decision that allowed the IRS to obtain business records in order to apply the onerous 280E provision of the tax code.

The filing this week is a long shot, but it’s the last legal avenue for Denver-based Standing Akimbo, which claims the IRS overstepped its authority and also violated the company’s Fourth Amendment privacy rights.

The appeal was reported by Colorado Politics.

Standing Akimbo is asking the nation’s highest court to settle some of these questions:
  • Does the Fourth Amendment protect taxpayers from having confidential information released to the IRS and federal law enforcement authorities?
  • Does the application of Section 280E to state-legal marijuana businesses violate the federal constitution? Under 280E, cannabis companies can’t deduct ordinary business expenses because marijuana is illegal on a federal basis.

Standing Akimbo in effect is arguing that it has a reasonable expectation of privacy and that its conduct cannot be “simultaneously lawful and unlawful.”

Underlying the issue is the conflict between state and federal marijuana laws.

The Supreme Court has passed on considering similar challenges to 280E and hears only a small percentage of appeals filed each year.