(CNN) — Some Colorado marijuana sellers are challenging Uncle Sam. They’re filing a lawsuit — saying the IRS shouldn’t be allowed to collect taxes on marijuana sales because marijuana is illegal under federal law.
Attorney Rob Corry says forcing Colorado’s recreational marijuana businesses to pay violates the United States Constitution.
He has filed a lawsuit in District Court on behalf of clients, some of whom say taxes could be used as evidence in any future prosecution.
“They’re open records and they are admitting to a federal crime. It’s still a federal crime to sell marijuana,” Corry said.
Recreational marijuana was legalized in Colorado on the condition sales would be heavily taxed — with proceeds going toward schools and regulation.
Even the federal government gets its share.
“The federal government takes money from a criminal enterprise. That’s part of money laundering — when they can seize the money because it’s illegal, but then to take it in and use the money?” Tom Gorman, who heads the Federal Drug Task Force said.
Attorney Amanda Cruser, who once worked in the Justice Department’s Tax Division says the IRS just wants its money.
“They can collect taxes on gross income from whatever source derived. So therefore, they don’t care whether it’s non-legal or legal source income,” Cruser said.
Last summer, the Justice Department said it will not interfere with recreational marijuana industries in Colorado and Washington state — for now.
“We don’t know what a new president is going to do, and of course we know we are going to have a new president,” Corry said.
“I think the federal government needs to make up its mind, whether they have supremacy over state law,” Gorman said.
If the feds do decide at some point to prosecute marijuana businesses, Cruser says it won’t be difficult.
“Frankl,y if you’re operating that business and you have a store front, it’s blatantly obvious what you’re doing,” Cruser said.
Cruser emphasizes — folks should be paying their taxes.
What do you think?