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Mm Business Law 101

Jennifer8

By Jennifer8
in Caregiver Issues

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Jennifer8 Advanced Member

+Jennifer8

Posted
Posted

I have spent an hour looking through threads, but cannot find specific answers to my questions, so I am asking in this location. Move this thread to where it is appropriate if not here.

 

Ok, let's say a person, who is not breaking the law, who looks to be an honest business person, becomes a legally legit caregiver.

 

If a person, who is an awesome caregiver, who also happens to get compensation for being a caregiver, and who wants to always do the right thing in the eyes of the law, does that person need to get their "business name" or "business" registered at a courthouse or city hall, depending on how one legally registers a business in their area?

 

If caregiving is dealing with issues that are federally illegal, is one going to have to pay federal taxes on income? If it is federally illegal, why does the federal government want people to pay taxes? Is there a federal tax law that says one has to pay taxes on something the state sees legal but the federal government considers illegal? Having written that, is the federal government obligated to somehow make your life a nightmare if you are trying to be a law abiding citizen by paying rightful taxes on something deemed illegal yet legal?

 

These are issues that will often FORCE a law abiding citizen to almost break the law. One is damned by the government if he or she does and damned by the government if he or she doesn't. Isn't that a quasi form of entrapment? Should the federal government have a legal obligation to not cause confusing crap like this to have to happen?

 

Let's say, for whatever reason, this or another president, or the Attorney General decides to tell state governments officials and federal law enforcement officials to crack down on medical marijuana by patients, and that caregivers and dispensaries are not going to be protected, yet it is still legal under state law? It is forcing people to simply not pay taxes or go legit, or even bother with it, for that matter?

 

How are these matters to be handled as a legitimate business and utilizing the federal and state tax issues?

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Guest Wayne

Guest Wayne

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The law as written has no provisions for business designation or tax codes. The foresight of Proposal 1's authors to include language barring inspections is one of the main reasons municipalities are being so bold with moratoriums and bans on home cultivation. They are trying to push the legislature to act and empower them. I see little concern regarding taxes and the IRS will not allow business deductions for cannabis cultivation.

 

Brick and mortar businesses such as dispensaries were not addressed by Proposal 1 and it will be up to the government, at every level, to either approve, or declare them illegal. When the time comes the government will set the tax codes as seen fit by your representatives.

 

Should the President of the United States direct the DEA to enforce federal law we're screwed, if caught!

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peanutbutter Advanced Member

peanutbutter

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The bad news ..

 

Section 280 (e) of the US tax code was established to punish persons involved in the marijuana business.

 

Under that snip of tax code, we are not allowed to use any costs as deductions from the income of the business.

 

Example .. you do a patient a favor. You purchase an oz. of marijuana for $300. You hand it to the patient for $300.

 

Your profit on the transaction, for tax purposes, is $300. You then are responsible to pay federal income tax on the entire $300.

 

It would sure be nice if they repealed that section of code. It would be much easier to honestly pay taxes.

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Jennifer8 Advanced Member

+Jennifer8

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First of all, thank you for moving this to where it would best be located. I always appreciate that.

 

Thank you to those of you who contribute. This whole thing makes me loopy sometimes.

 

I would think the federal government would not just want, but NEED every single dollar they could get, so I would hope they somehow, and expeditiously, iron out these kinks. Especially after the 2003 Department of Treasury's Financial Report of the United States Government was released showing the unreconciled transactions spent by government officials. (I'm almost too scared to find out what their "unreconciled transactions" amounted to in 2009.)

 

 

The Missing $25 Billion

 

Buried in the Department of the Treasury's 2003 Financial Report of the United States Government is a short section titled "Unreconciled Transactions Affecting the Change in Net Position," which explains that these unreconciled transactions totaled $24.5 billion in 2003.[2]

 

The unreconciled transactions are funds for which auditors cannot account: The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately...

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peanutbutter Advanced Member

peanutbutter

Posted
Posted

First of all, thank you for moving this to where it would best be located. I always appreciate that.

 

Thank you to those of you who contribute. This whole thing makes me loopy sometimes.

 

I would think the federal government would not just want, but NEED every single dollar they could get, so I would hope they somehow, and expeditiously, iron out these kinks. Especially after the 2003 Department of Treasury's Financial Report of the United States Government was released showing the unreconciled transactions spent by government officials. (I'm almost too scared to find out what their "unreconciled transactions" amounted to in 2009.)

 

 

However you decide to pay your taxes, it could work against anyone using the word "marijuana" on their tax forms.

So that is a word to avoid using on those tax forms.

 

"caregiver" "gardener" whatever .. just not the word "marijuana"

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  • 5 weeks later...
Mr CPA Member

Mr CPA

Posted
Posted

However you decide to pay your taxes, it could work against anyone using the word "marijuana" on their tax forms.

So that is a word to avoid using on those tax forms.

 

"caregiver" "gardener" whatever .. just not the word "marijuana"

 

Exactly right! Too many people want be clever coming up with some cheeky name for their business. If you want to succeed unnoticed, keep all of your official activities, names, filings as innocuous as possible. If you have got to have a clever name for your business, save that for your trade name or the name you don't report to the State and Feds.

 

If you make any reference to MM on your State Business Registration application the Dept of Labor, Energy and Economic Growth will reject the application because they are of the mind that the "reasonable reimbursement for expenses" aspect of the MMMA automatically forces any business into nonprofit status. Nonprofit is both dangerous and expensive to the caregiver. Dangerous because Federal exemption mandates full disclosure. Expensive because federal exemption applications currently cost $400 or more. It's also a f@#king pain-in-the-butt 30 page application.

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Mr CPA Member

Mr CPA

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I was going to suggest registering as an alternative medicine business.

 

Could be peppermint and sage you are growing in your backyard.

 

LLC don't have to disclose what they do on the State registration form. The form has a spot for listing your business activity but you can leave it blank and it will be accepted.

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