A federal lawsuit by medical marijuana business Rifle Remedies claims that that the U.S Department of Justice has been using the Internal Revenue Service to investigate legitimate cannabis operations all over Colorado. But Uncle Sam’s bean counters say these accusations are “baseless and illogical,” according to a report from the Denver Post.
A recent U.S. District Court case argues that IRS inquiries, specifically those asking for Colorado’s Marijuana Enforcement Division to provide the agency with information on how much marijuana is being grown, sold and who is buying the product, is just a secret method of helping the DOJ build a case against legal marijuana businesses.
The IRS says it only wants to employ this method to uncover unpaid taxes.
Although marijuana businesses are perfectly legal in Colorado, the IRS still considers these operations a part of outlaw commerce. It is for this reason that the cannabis industry is not allowed the same deductions as more traditional businesses, and it puts them at higher risk of being audited by the U.S. government.
Yet at least one court case suggests that these IRS probes are simply a way for multiple federal…