The 280E Reform Team is committed to providing accurate and timely federal tax information to medical cannabis patients and caregivers, journalists and the general public. Members of the working media may view current 280E Reform press releases or use the contact page to request an interview or background information.
Below are some links to news coverage about 280E Reform and related issues.
By Steve Hargreaves, CNN Money
Thanks to a decades-old law targeting drug runners, entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%.
The hefty levy is the result of a 1982 provision to the tax code, known as 280E, that stemmed from a successful attempt by a convicted drug trafficker to claim his yacht, weapons and bribes as businesses expenses, according to 280E Reform, a group working to overturn the statute.
By Robert W. Wood, Forbes contributor
With 15 states having legalized the sale of medicinal marijuana, the only thing growing faster than the number of 24-year old males with questionable glaucoma prescriptions is the IRS’s scrutiny of this controversial industry.
While local law may have blessed the existence of medicinal marijuana facilities, the IRS is not bound by such decisions. The IRS cares only about tax collections, and during 2012 it threw down the gauntlet, presenting a flurry of challenges to medicinal marijuana dispensaries that indicate the Service’s willingness, and more importantly, its ability, to tax the industry out of existence.
Steve DeAngelo was the featured guest on the April 23 edition of Lanny Swerdlow’s “Compassion and Common Sense” radio show on KCAA. You can right-click this link to download a 7 Mb segment pertaining to 280E Reform, or listen to the whole show. Click on the audio bar to fast-forward; Steve’s interview begins around the 13:25 mark.
Medical Marijuana Dispensaries Keep On Truckin’ Despite IRS
By Robert W. Wood, Forbes contributor
…Our tax code is now so massive that even experienced tax lawyers don’t know about every provision. The obscure provision in question is Section 280E. It precludes deductions for any business trafficking in controlled substances. It’s meant to stop drug dealers from claiming tax deductions.
Its current (and surely unintended) effect? Even if state law allows marijuana for medical use, federal law still classifies it as a controlled substance.
Obama Administration’s War On Pot: Oaksterdam Founder Richard Lee’s Exclusive Interview After Raid
By Lucia Graves – The Huffington Post
WASHINGTON — When federal agents raided Oaksterdam University, Richard Lee’s downtown Oakland, Calif.-based trade school, earlier this month, it wasn’t simply a crackdown on a local pot business, it was one of the highest-profile moves in the Obama administration’s nationwide assault on medical marijuana.
DEA and IRS agents hauled away computers, files and pot plants, leaving behind little more than office furniture. They did not disclose the reason for the raid and have not charged Lee with any crime as of yet. In an exclusive interview with The Huffington Post, his first since the raid, Lee, 49, blasted the federal crackdown as a senseless act of intimidation. “This is one battle of a big war,” said Lee, “and there’s thousands of battles going on all over.” …
… Lee told HuffPost he thinks the tax issue is where the school may have run into trouble with the authorities.
“It may have something to do with the 280E taxes we’ve been forced to pay,” he said. “It was impossible to pay them on top of the other taxes we’re forced to pay: $60,000 to the City of Oakland for the permit fee, $130,000 for the Oakland Business Tax, 10 percent state sales tax, state income tax, federal income tax, unemployment insurance, workman’s comp insurance, health insurance.”
“Our income tax more than doubled because payroll, rent and other tax deductions were disallowed,” he added. “On top of this, the federal government has been closing our bank accounts, making it more difficult for us to operate as a normal business and pay our taxes.”
Tea Party Warrior: Report Medical Marijuana Clubs to the IRS and Get Rich
By Chris Roberts, The Snitch Blog/S.F. Weekly
For Paul Chabot, the War on Drugs is personal indeed: Before he became a Navy man, a campus cop, and a former National Drug Control Policy staffer, he was in drug rehab for alcohol and marijuana addiction himself — at the young age of 12, according to his bio.
In his latest tactical maneuver in the marijuana war, however, San Bernardino County’s Chabot is aiming not at the children or our lapsed morals — he’s going right for our checkbooks.
Californians — and “every dad, mom and other citizen who has been affected by pot stores and drug legalization tactics” should become “IRS Pot Store Whistle-blowers,” according to an e-mail Chabot sent Monday to the Coalition for a Drug Free California’s e-mail list. The e-mail came under the subject line: “Call the IRS and you could earn millions!”
Citizens Urged To Report Dispensaries To IRS For Cash Rewards
By Steve Elliott, Toke of the Town
The extremist anti-drug group Coalition for a Drug Free California (CDFC) has encouraged citizens from around the state and nation to become dispensary whistle-blowers.
“By simply reporting a pot store to the IRS, average citizens who are fed up with these domestic marijuana cartels can now fill out a very simple form,” said Dr. Paul Chabot, founder of the CDFC. “If the IRS takes action and fines the pot store, the whistle-blower, by law is entitled to a 30 percent cash award.”
CDFC points to a recent case in which the IRS took action against a pot store in northern California with a $2.4 million tax investigation.
“If this was a whistle-blower case, the whistle-blower would get 30 percent of the $2.4 million which is roughly $700,000 in your pocket,” Chabot said. “Pot stores are in violation of Federal law. This is a no brainer – every dad, mom and other citizen who has been affected by pot stores and drug legalization tactics should use this tool to fight back.”