Will the Feds Pull An "Al Capone" On The New "legal" California Growers?

Will the Feds Pull An "Al Capone" On The New "legal" California Growers?

With the new California cannabis law taking effect in 2018, any licensed growers will have to pay tax for the income made selling cannabis to dispensaries. I believe the FTB is licking its chops over the new revenue. I know for a fact that any income reported to the IRS is reported by them to the FTB.

The question is: will the FTB report the income to the IRS?

If so, it creates a pretty scary situation for the growers. As it is now, the DOJ is prohibited from using its funds against those who are operating legally under California law.

Yet, if the DOJ regains its power to prosecute, it could lead to California growers being prosecuted for tax evasion by the US, ala, Al Capone, who was prosecuted (and convicted) for not reporting and paying income tax on his illegal profits.

The alternative is to report and pay US income tax on grower income.

However, that would be a waiver of the 5th Amendment right to not incriminate oneself, and would unleash the DOJ to pursue federal cannabis sale prosecutions against those who just made it easy on them by admitting the crime (again, assuming the DOJ isn't relieved from their current restraint and also that cannabis is not de-scheduled in the meantime).

Thoughts?

The doj wont gain shit this non funding by congress will continue but if your operating illegally your screwed anyway

IRS says pot is illegal — but you still have to pay taxes

IRS says pot is illegal — but you still have to pay taxes

pretty sure colorado pays taxes to the feds

heres an article about it

https://www.cnbc.com/2016/01/29/irs-says-pot-is-illegalbut-you-still-have-to-pay-taxes.html

Thanks for the article, herbgreen.

It seems like a catch-22 to me. Report income to the IRS and you don't have to worry about being prosecuted for tax evasion or wilful failure to file, but if you're specific enough, you'll make a federal possession and sale case for the DOJ.

im sure any state that isues a busness lic to grow/sale , get state taxes & u pay fed tax also.i would.

The Fed government has a good deal here in Colorado. The dispensaries must pay the IRS taxes but the disps can't use the tax credits that every other business can use. The disps have trouble getting a business bank account because if they have a weed related name, the banks throw them out. Some disps have a full time employee that runs all over town every day and pays all the bills with cash money.

I wouldn't trust the US gov.

any further than I can throw the Washington Monument.

Not paying taxes is interesting. If you don't live the lifestyle, they require accounting books to prove you made money not reported.

I'm guessing people want to flaunt the gains.

St. Phatty said:

I wouldn't trust the US gov.

any further than I can throw the Washington Monument.

Click to expand...

Even less for me.