See my comment about the Chicago Outfit in this thread. They figured out the best way if you have a lot of illegal income.
In theory. In actuality I think you could make a reasonable argument that the suspicion of parallel construction means that you may plead the 5th.
IRS is federal isn’t it? Does that mean they would consider weed sales illegal?
Weed is illegal under US law. Nothing meaningful about the federal prohibition on weed has changed for decades.
AFAICT all dispensaries are admitting federal crimes when they file federal tax returns. I believe the statute of limitations on controlled substances violations is 5 years, meaning dispensers are theoretically always under threat that the next administration will bring down the hammer and prosecute them for sales occurring today.
https://www.irs.gov/publications/p17
> Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8, or on Schedule C (Form 1040) if from your self-employment activity.
You're theoretically safe from them disclosing this to other law enforcement agencies. (I wouldn't want to test that, though.)
https://money.cnn.com/2013/02/28/news/economy/illegal-income...
> If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops?
> Legally, it can't, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. The IRS isn't supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own.