Tax Court Upholds $1.2M Deficiency On Marijuana Retailer

Law360, New York (August 10, 2015, 8:20 PM EDT) -- The U.S. Tax Court on Monday said the owner of two California medical marijuana dispensaries is prohibited from claiming deductions related to the businesses under federal drug trafficking laws and upheld a $1.2 million tax deficiency assessed by the Internal Revenue Service.

Though the businesses were legal in California, medical marijuana is a controlled substance under federal law and taxpayers cannot deduct expenses related to businesses that run afoul of federal drug laws, the panel said.

“A taxpayer may not deduct any amount paid or incurred...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.