Pubdate: Sun, 19 Jul 2015
Source: Hudson Hub-Times (OH)
Copyright: 2015 Record Publishing Co, LLC.
Contact:  http://www.hudsonhubtimes.com/
Details: http://www.mapinc.org/media/4777
Author: Kenneth Wood

UNCLE SAM SAYS NO TO MARIJUANA

Looks like someone other than myself votes "No" on this November's 
likely ballot issue seeking a constitutional amendment legalizing the 
personal use and growth of marijuana in Ohio. This "No" voter is 
Uncle Sam in the embodiment of the Internal Revenue Service. Let me explain.

Marijuana is still classified on federal drug schedules as a 
"Schedule I" controlled substance. Thus, under federal law, the sale 
of marijuana remains illegal. A recent newspaper article highlighted 
a story that a famous boy band star and other luminaries may invest 
in a pot-growing center to be located in Hudson.

Pot investors, try this one on for size:

Internal Revenue Code section 280E specifically denies a deduction or 
credit for any expense in a business consisting of trafficking in 
illegal drugs "prohibited by federal law or the law of any state in 
which such trade or business is conducted."

Thus, IRS will not allow even a state-sponsored marijuana growing 
business to deduct its expenses on its federal tax return! Federal 
laws criminalizing these activities remain; punishments can be 
assessed against anyone who grows, sells, imports, or holds 
controlled substances,such as marijuana. In fact, the Drug 
Enforcement Agency has used these laws to raid marijuana businesses 
that are legal under state statutes and regulations.

Tax adviser/CPAs should also be aware of an unofficial paper drafted 
by the AICPA with input from the CPA societies. This paper advises 
CPAs to be wary of offering services to marijuana businesses because 
doing so may inadvertently violate a "good moral character" rule 
promulgated by their state's governing professional board of accountancy.

Even where decriminalized, marijuana trafficking remains a source of 
violence, crime and social disintegration. Furthermore, studies have 
shown that legalized marijuana will provide nowhere near the economic 
windfall proclaimed by its proponents.

"Responsible?" hardly.

Kenneth Wood, Hudson
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MAP posted-by: Jay Bergstrom