While marijuana may soon be rescheduled under federal law, that doesn’t currently exempt state-legal cannabis businesses from an Internal Revenue Service (IRS) code known as 280E that bars them from taking federal tax deductions, the agency argues in a new filing with the U.S. Tax Court.
In response to a petition to the court filed by the New Mexico marijuana business Ultra Health—which challenged the conventional interpretation of the IRS code, which applies to tax deduction claims connected to the sale of Schedule I and Schedule II drugs under the Controlled Substances Act (CSA)—IRS said the issue has already been soundly settled by Congress and various federal courts.
