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(LA Times)   56-year-old convicted drug dealer made millions off his nine pot dispensaries, forgot the little detail about reporting income to the IRS. Has it already been long enough for people to forget how Capone went down?   (latimes.com) divider line 30
    More: Dumbass, IRS, Dana Point, San Clemente, dispensary, safe harbors, grocery bags, incomes  
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1536 clicks; posted to Business » on 30 Mar 2013 at 11:35 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-30 08:22:21 AM  
how can you compare this guy to Capone?  Capone was gay
 
2013-03-30 11:12:13 AM  
He who lives by the greed, dies by the greed, man.
 
2013-03-30 11:33:39 AM  
Wait, are you telling me Al Capone wasn't just a second hand furniture dealer?
 
2013-03-30 11:38:37 AM  
And this ladies and gentlemen, is how the federal government is going to enforce the federal prohibition on marijuana in states that have legalized it.
 
2013-03-30 12:11:15 PM  
coedmagazine.files.wordpress.com
 
2013-03-30 12:35:35 PM  
Syphilis?
 
2013-03-30 12:37:40 PM  
I'm confused about what was going on here. If other people owned the dispensaries on paper, then why were they handing over the profits to this guy? All I can think of is that he might have provided the start-up money for the dispensaries, but TFA isn't really clear about the nature of his connection to them.
 
2013-03-30 12:54:26 PM  
Hmm, so declare your fifth amendment right against self incrimination in a letter and send it to the IRS.

Seriously. If you send the IRS a tax form declaring your income from a federally illegal activity you are supplying evidence in the prosecution against yourself. So any clarity about your income, from the source to the size, would be constitutionally protected information.

Unless, you know, we're just profit centers for Pfizer and ConAgra.
 
2013-03-30 01:01:43 PM  

wildcardjack: Hmm, so declare your fifth amendment right against self incrimination in a letter and send it to the IRS.

Seriously. If you send the IRS a tax form declaring your income from a federally illegal activity you are supplying evidence in the prosecution against yourself. So any clarity about your income, from the source to the size, would be constitutionally protected information.

Unless, you know, we're just profit centers for Pfizer and ConAgra.


I've often wondered how that worked.  Can you make an anonymous "donation" to the IRS?
 
2013-03-30 01:15:43 PM  

BigLuca: wildcardjack: Hmm, so declare your fifth amendment right against self incrimination in a letter and send it to the IRS.

Seriously. If you send the IRS a tax form declaring your income from a federally illegal activity you are supplying evidence in the prosecution against yourself. So any clarity about your income, from the source to the size, would be constitutionally protected information.

Unless, you know, we're just profit centers for Pfizer and ConAgra.

I've often wondered how that worked.  Can you make an anonymous "donation" to the IRS?


It's called a 1099 MISC form.  This guy was an idiot.

You have to say who you are and your Social Security number, but not the type of business.

PDF form: www.irs.gov/pub/irs-pdf/f1099msc.pdf
 
2013-03-30 01:33:44 PM  
blog.aacriminallaw.com
 
2013-03-30 01:34:33 PM  
btchin trans-am:
It's called a 1099 MISC form.  This guy was an idiot.

You have to say who you are and your Social Security number, but not the type of business.

PDF form: www.irs.gov/pub/irs-pdf/f1099msc.pdf


So then why do people need to launder money?  I thought the point of that was to obscure the source so you can use the money for legitimate purposes and pay taxes on it, etc...

What if you get audited for another reason, would you have to show the source then?
 
2013-03-30 02:13:48 PM  
the only way to report that income is to launder it, duh subby

/racketeering, etc.
 
2013-03-30 02:23:53 PM  

Tom_Slick: And this ladies and gentlemen, is how the federal government is going to enforce the federal prohibition on marijuana in states that have legalized it.

  tax evaders.
 
2013-03-30 04:18:33 PM  
On the positive side, you're allowed to deduct cost of goods sold. Just don't try deducting other "business expenses" related to the sale/distribution.
 
2013-03-30 04:58:15 PM  
The guy who came up with the idea of going after Capone for tax evasion died in 1951 and not many people even know who he was.
 
2013-03-30 07:09:27 PM  

Gough: The guy who came up with the idea of going after Capone for tax evasion died in 1951 and not many people even know who he was.


Why would fame be important?
 
2013-03-30 07:12:05 PM  

shanrick: He who lives by the greed, dies by the greed, man.


done in two. seriously. I have little sympathy for this guy. Not only greedy, but too stupid tor cheap to pay for a decent tax attorney/cpa. I guess the thought of opening a tax shelter business that loses money just never occured to him.
 
2013-03-30 07:18:59 PM  

Tom_Slick: And this ladies and gentlemen, is how the federal government is going to enforce the federal prohibition on marijuana in states that have legalized it.


Or just hit him with federal drug laws. State laws can't supersede federal laws, marijuana is still illegal in states like California. Legalizing it helps keep small time users from being busted. Dispensaries and their owners will still get raided by the feds.

I can't tell from the article if the 13 other people arrested and charged with crimes where part of his dispensaries or not.
 
2013-03-30 08:13:09 PM  
Well, I sure feel safer now that this dangerous criminal is behind bars.
 
2013-03-31 02:21:32 AM  
i thought the IRS doesn't care how you do it, as long as you pay it. Like some things can't be shared/reported, or is that just the Census
 
2013-03-31 03:25:37 AM  
The whole evolving business model of marijuana

At moment run by hippy-growers with SFA business nous, and by crims who work by muscle/force

Neither group has commercial ability to raise capital, apply management and marketing skills, and run the show as a business (ie pay taxes and fees)

Same thing happened when Prohibition was repealed in 1930's - you don't see the criminal gangs or the local bathtub gin boys running the liquor distribution businesses today

Legal marijuana is coming, but it will be commercialized first by the guys with local political connections, then they will sell out to national brands consolidating along the line of Big Tobacco
 
2013-03-31 06:44:38 AM  
Meanwhile the guys laundering money at HSBC are still free and major companies making billions in profit pay nothing in taxes on that profit
 
2013-03-31 11:12:33 AM  
I see the 1099-misc has already been mentioned.

The problem isn't persecution here so much as idiots with no clue how to run a business trying to run a business.  That causes problems in other industries, too.
 
2013-03-31 01:15:13 PM  

BarkingUnicorn: Tom_Slick: And this ladies and gentlemen, is how the federal government is going to enforce the federal prohibition on marijuana in states that have legalized it.  tax evaders.


This...
Not a "crack down" on dispensaries, the persecution of a tax evader.. The Feds have been Debbie downers on that particular issue for the last 235 years or so...

Just reminds me of some conversations I had with California pothead friends around election time. they were all bemoaning Obama and his supposed crack down on dispensaries. Every one I looked into involved dispensary owners doing shady, underhanded things that the absolutely did not have to do. You would think that individuals running a business that is so lucrative and so controversial would follow the damn rules to a T.
 
2013-03-31 03:01:48 PM  
Tax evasion is a biatch, whether you're Cyprus or a pot grower.
 
2013-03-31 05:09:55 PM  

btchin trans-am: BigLuca: wildcardjack: Hmm, so declare your fifth amendment right against self incrimination in a letter and send it to the IRS.

Seriously. If you send the IRS a tax form declaring your income from a federally illegal activity you are supplying evidence in the prosecution against yourself. So any clarity about your income, from the source to the size, would be constitutionally protected information.

Unless, you know, we're just profit centers for Pfizer and ConAgra.

I've often wondered how that worked.  Can you make an anonymous "donation" to the IRS?

It's called a 1099 MISC form.  This guy was an idiot.

You have to say who you are and your Social Security number, but not the type of business.

PDF form: www.irs.gov/pub/irs-pdf/f1099msc.pdf


You use that form when you pay a contractor to perform a service for you. You don't use that form when you are self employed. He could use schedule C to report his income. He could even report his income on line 21 - other income and he could avoid paying payroll taxes, but he would not be able to deduct expenses.
 
2013-04-01 01:31:40 AM  

MatrixOutsider: He could even report his income on line 21 - other income and he could avoid paying payroll taxes, but he would not be able to deduct expenses.


Would he still have to pay self-employment tax on line 21 income?
 
2013-04-01 06:23:44 AM  
Occupation: not a drug dealer
 
Income: $0
 
Itemized Expenses:
 
$50 - 5,000 plastic ziploc bags
$100 - 1,500 small glass vials
$25 - 5000 ct. money straps ($100)
 
2013-04-01 01:30:10 PM  
Wouldn't reporting the size of the income (required to pay taxes on it) be self-incriminating if they ever brought charges?
 
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