Harborside Health Center vs. Internal Revenue Service

Better Essays
Harborside Health Center vs Internal Revenue Service Federal Tax Code section 208E states “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.” This tax code was put into effect under President Reagan to keep drug traffickers from claiming expenses on their taxes that would allow them to receive government money. Many people have believed for years that marijuana is a gateway drug and the people who grow or sell it are criminals. Now with the first state, California, legalizing marijuana for medical usage, questions of how to tax the medical marijuana dispensaries have arisen. Since 1996, this topic has become a forefront issue in politics.
Federal Tax Code section 280E was passed by congress in 1982, when the Internal Revenue Department brought a case against a convicted cocaine trafficker. The trafficker in reply to the IRS, filed a return where he claimed deductions for objects used to traffic said drugs (i.e. the guns bought for protection ect.) Being that no regulations were put into place to combat this issue, the IRS was required to accept the returns. As a result of this, the trafficker was allowed to keep over half of his earnings. The Tax Code was plainly meant to apply to people who were illegally trafficking drugs and trying to claim their “business expenses” to maintain their lifestyle. This did not pertain to organizations, such as dispensaries, set up to abide strictly to the laws of their state. So why try to tax a company trying to do the right thing with their business?
Enter the case of Harborside Health Center v. the IRS. With 22 million

You May Also Find These Documents Helpful

  • Better Essays

    Form W-8BEN (Rev. February 2006) Department of the Treasury Internal Revenue Service Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding OMB No. 1545-1621 Section references are to the Internal Revenue Code. See separate instructions. Give this form to the withholding agent or payer. Do not send to the IRS. Do not use this form for: ● A U.S. citizen or other U.S. person, including a resident alien individual ● A person claiming that income…

    • 852 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    THE INTERNAL REVENUE ALLOTMENT OF THE MUNICIPALITY OF CAINTA, RIZAL SUBMITTED BY: DELA PEÑA, DOROTHY ANN DESTRIZA, LYRA JANE MAGUNDAYAO, TRICIA JANE PS1122 OCTOBER 21, 2014 The Municipality of Cainta which was founded in 1571 is located in the Province of Rizal in Region 4-A or so called CALABARZON (which stands as Cavite, Laguna, Batangas, Rizal and Quezon). The municipality is considered as a first-class urban municipality in the Province of Rizal with a land area of 26.81 km2 which was…

    • 763 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    January 31 of the year following the calendar year in which the compensation payment and other income payments subjected to final withholding taxes were paid or accrued. The return shall be filed with the Revenue Collection Officer or duly authorized City/Municipal Treasurer of the Revenue District Office having jurisdiction over the withholding agent's place of business/office. A taxpayer may file a separate…

    • 755 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Internal Revenue Code

    • 3297 Words
    • 14 Pages

    Table of Contents IRC 11(a) - Tax imposed 2 IRC 7701(a)(3) - Definitions 2 IRC 7701(a)(4) 2 IRC 7701(a)(5) 2 Reg 301-7701-3(a); 301-7701-3(b)(1); 301-7701-3(c) 2 Section 301.7701-3(a) 2 Section 301.7701-3(c) 3 IRC 243 - Dividends received by corporations 3 (a) General rule 3 (b) Qualifying dividends 3 (C) Election 5 (d) Special rules for certain distributions 5 (e) Certain dividends from foreign corporations 6 IRC 246(b), 246(c) - Rules applying to deductions for dividends…

    • 3297 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    In the United States, the Tax returns are filled and reported with Internal Revenue Service (IRS) or local tax collection agency like California Franchise Tax Board or with state. The reported documents carry the information used to calculate the all types of the taxes especially the income taxes. The tax returns are made by the IRS or any other applicable taxing authority. Due to the provisions of the Affordable Care Act in the United States there is intertwined complexity in the taxes and healthcare…

    • 907 Words
    • 4 Pages
    Good Essays
  • Better Essays

    more complicated is that it is required by law. When a consumer of a good is unsatisfied with the product they are receiving, they can usually go elsewhere and get what they want. With taxes, there is no other way than through the IRS. So if the service is bad, it will irritate taxpayers causing them to turn in poor quality tax returns or join those who consciously evade paying taxes. The IRS can influence taxpayers desire to pay taxes by making the interfacing system they use easy. A simple tax…

    • 1112 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Bureau of Internal Revenue (Philippines) The Bureau of Internal Revenue (Filipino: Kawanihan ng Rentas Internas, or BIR) is an attached agency of Department of Finance. BIR collects more than one-half of the total revenues of the government. Functions The powers and duties of the Bureau of Internal Revenue are: Assessment and collection of all internal revenue taxes, fees and charges; and enforcement of all forfeitures, penalties, and fines connected therewith, including the execution of judgments…

    • 380 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Form 940 Internal Revenue

    • 1914 Words
    • 8 Pages

    Form 940 for 2010: Department of the Treasury — Internal Revenue Service — Employer's Annual Federal Unemployment (FUTA) Tax Return Type of Return (Check all that apply.) 850110 OMB No. 1545-0028 (EIN) Employer identification number Name (not your trade name) Trade name (if any) Address Number Street a. Amended b. Successor employer c. No payments to employees in 2010 d. Final: Business closed or stopped paying wages Suite or room number City State ZIP code Read…

    • 1914 Words
    • 8 Pages
    Good Essays
  • Better Essays

    Revenue Cycle and Control Activities The revenue cycle for many companies is considered the primary source to earn revenue from the sale of goods or service. Good controls must be established to maintain the effectiveness of receivables and credit sales, not doing so can harm the company and might be costly to the business. Six classes of internal controls guides us in evaluating and designing transaction processing. They are authorization, supervision, segregation of duties, access control, independent…

    • 2286 Words
    • 10 Pages
    Better Essays
  • Good Essays

    Shared Service Center

    • 42228 Words
    • 169 Pages

    Management control in Shared Service Centers - How to influence people in the striving towards organizational goals Authors: Emma Carlsson Ann Schurmann Avdelning, Institution Division, Department Ekonomiska institutionen 581 83 LINKÖPING Språk Language Svenska/Swedish X Engelska/English Rapporttyp Report category Licentiatavhandling Examensarbete C-uppsats X D-uppsats Övrig rapport ____ URL för elektronisk version http://www.ep.liu.se/exjobb/eki/2004/iep/015/ Titel Title Författare Author…

    • 42228 Words
    • 169 Pages
    Good Essays