Please read the following article:R. Russell & R. Russell, The Taxation of Breaking Bad: IRC Section 162 and Deductible Business Expenses for Marijuana Dispensaries, The CPA Journal (October 2017)(Links to an external site)

. Under Federal tax policy, Illegal businesses are generally taxed in the same way as legal ones, and are generally allowed the same deductions. However, during the 1970's and 1980's, the Federal government began its "War On Drugs Campaign" and introduced Internal Revenue Code Section 280E which specifically denies deductions to business which sell marijuana or other drugs. The Federal government created 280E to assist with the "War On Drugs" campaign due to the vast amount of state and Federal legislation and resources that were being spent on fighting drugs.

Currently, over 25 states have some form of relaxed marijuana legislation. But state-sanctioned Marijuana Dispensaries, while legal at the state level, are still illegal Federally. To make matters more confusing, policy's such as the Obama-era, Ogden and Cole memorandums from the Justice Department dictated that the Justice Department and the Executive Branch would simply decline to enforce Federal law in States which had legalized marijuana. In addition, Congress has continuously updated various versions of the Rohrabacher-Farr amendment which prohibits the Justice Department from spending Federal funds to interfere with state medical marijuana laws. While the previous Attorney General, Jeff Sessions, had indicated that he would like to fully prosecute all marijuana crimes, the Federal government lacks the funding necessary to fully prosecute all marijuana dispensaries without the assistance of state law enforcement. Furthermore, the current presidential administration has lightly followed Obama-era policy in actions, although not in words.

Given the confusing aspects of Federal law on marijuana, do you think that Federal government should repeal section 280E and tax marijuana dispensaries the same way as other illegal business? Why or Why Not?