As per reports that came out last week, the IRS has been scrutinizing marijuana non-profits far more than other organizations that were applying for the same thing. The IRS cites that the marijuana non-profits received additional attention due to concerns that “…they were engaging in activities that were not permissible under tax-exempt law…” However, many of the organizations that applied have no connection to selling or growing marijuana. Do you think that this additional level scrutiny is warranted?
The Internal Revenue Service (IRS) is in charge of handling the nation’s taxes. So you’d think they’d need to be as fair and unbiased as possible. But apparently when it comes to marijuana, the IRS doesn’t see things so clearly.
A federal report that came out on Thursday said the IRS gave marijuana organizations that applied for non-profit, tax-exempt status far more scrutiny than others applying for the same thing.
“The IRS identified the Medical Marijuana organizations for further scrutiny because of concerns that they were engaging in activities that were not permissible under tax-exempt law,” the Treasury Inspector General for Tax Administration (TIGTA) said in the report. “Specifically, some States were legalizing the use of medical marijuana, but it was illegal under Federal law so the organizations did not meet the requirements for Federal tax exemption.”
The issue is that many of the organizations that applied for the tax-exempt status have nothing to do with the actual growing or selling of marijuana. Instead, they’re groups that either seek to educate the public about cannabis issues or advocate for law reforms. Obviously, neither of those things is illegal under federal law. But marijuana organizations were still forced to undergo additional
“All of the Medical Marijuana cases took longer than average to process compared to the IRS’s overall average for non-merit cases in each fiscal year,” the review said. “We determined that all 10 organizations whose applications we confirmed were processed based on the Medical Marijuana criterion received letters requesting additional information to complete processing of their application. We reviewed these additional request letters and determined that four of the organizations received a request for information that TIGTA had concluded was unnecessary for processing political advocacy cases in our prior review.”
The IRS implemented new guidelines on how to deal with marijuana non-profits during the Obama administration. Considering how much the Trump White House has embraced cannabis, we can predict plenty of obstacles in their future.