Carole Swan testified Wednesday during a suppression hearing in U.S. District Court in Bangor that she’s basically illiterate. Swan’s inability to read much more than names and numbers will be a ‘‘fact of significance in her defense,’’ said Leonard Sharon, an attorney in Auburn. Swan couldn’t have known if her and her husband’s tax returns understated their income because she didn’t have a full understanding of their taxes without being able to read, he said. Her inability to read also plays into whether she understood that certain work had to be reported when filing for federal worker’s compensation claims, he added. ‘‘Her lack of reading ability affects her quantum of knowledge,’’ Sharon said. Swan was indicted in early 2011 on federal charges for allegedly using her position as a Chelsea selectwoman to extort $20,000 from a local construction company. She’s also charged with tax fraud and making false statements to obtain worker’s compensation payments.
Oddly, prior to her public servitude for Chelsea, Maine, Ms. Swan reportedly worked for a time at the U.S. Postal Service, which requires basic competency in English to be eligible for employment. So there's that.
Apparently there’s been a bit of unnecessary confusion out there about the deductibility of marijuana for medical purposes. The Wall St. Journal article that we linked to this morning discusses the problems employers are encountering wi e.g. can’t use HSA funds; they don’t care if you’ve got a card, if you test positive you’re fired).
But the question of deducting the cost of your White Widow et al. that you legally purchase in states like California and Colorado has been making the rounds. After a little discussion, it’s pretty clear that the IRS is not going allow you deduct your pot for tax purposes simply because it’s still illegal at the Federal level. Doctor’s note be damned.
The confusion arose due to the following letter that was sent to New York Senator Chuck Schumer, who had sent a letter to the IRS inquiring about a constituent using a “herb” to treat migraine headaches:
As with many facets of how to treat medical marijuana for tax and other purposes, it appears that those in charge are merely tiptoeing around the question. In the letter, the term “marijuana” is never used explicitly – the term used is “herb”. While it’s my understanding that the specifics of the case involved medical marijuana used for the treatment of migraines, that isn’t specifically stated in the sanitized version of the letter. No use of “marijuana”, just the term “herb.” That could be St. Johns Wort or milk thistle as far as the IRS is concerned.
Fortunately TaxProf Paul Caron clears up for us in a couple of updates from his latest post on this issue:
Update #2:Rev. Rul. 97-9, 1997-1 CB 77, specifically precludes a medical expense deduction for medical marijuana:
An amount paid to obtain a controlled substance (such as marijuana) for medical purposes, in violation of federal law, is not a deductible expense for medical care under § 213. This holding applies even if the state law requires a prescription of a physician to obtain and use the controlled substance and the taxpayer obtains a prescription.
So the IRS in Info. 2010-0080 either was (1) signalling a retreat from its position in Rev. Rul. 97-9 by not mentioning the federal legality of the substance; (2) implicitly referring only to legal herbs (and hence not covering marijuana).
Update #3: I am told by an enterprising reporter that the herb in question in Info. 2010-0080 is Petadolex, so it appears that interpretation #2 above controls and the conclusion in Rev. Rul. 97-9 denying a medical expense deduction for medicial marijuana still obtains.
So there you have it. Regardless if you have glaucoma, cancer, HIV, chronic pain, high anxiety or any ailment that marijuana can effectively alleviate, don’t bother trying to include it on Schedule A. We’d ask the IRS to implore a little common sense here but legally, as long as marijuana remains illegal at the federal level that’s not going to happen. And from a more practical standpoint, we’re still talking about the IRS.
Rangs sent a flier in the mail to his 15th District constituents so they could “put money back into your pockets.”
This particular bit of irony was not lost on the voters in the 15th District; the Daily News shared some of their thoughts including the obvious, “It’s probably not the best time to put something like that out,” to the practical, “I’d never take tax advice from that guy,” and those pointing out the chutzpah, “That is amazing. He certainly has gall.”
A spokesman is quoted that this SOP for Charlie during this time of year, “[He] has sent his tax newsletter to constituents for many years in order to assist them in filing their tax returns and ensuring that those who are eligible take advantage of important benefits, including the Earned Income Tax Credit.”
So maybe this is one of those time-honored Congressman Rangel traditions in the 15th District that operates like clockwork. Every tax season, voters can expect to get Chuck’s smiling face in their mailbox sharing tax advice on laws that he has helped write for decades. A little tax-related scandal isn’t going to put a stop to that. Unfortunately, we’re guessing the pamphlet doesn’t discuss how to exclude $75,000 in income from a rental property in the Dominican Republic. That would be taking things a bit too far.
Charlie Rangel may have lost (temporarily!) his 