It wouldn’t be tax day (in form, if not necessarily in substance) if the Raisin Bran™ of celebrity tax delinquents, Robert Snell, didn’t have a scoop today.
To make it even better, today’s edition is none other than perpetually tax-plagued Nicolas Cage.
In a storage locker last month, cops found Nicolas Cage’s rare $1.5 million, Superman comic book, which was stolen from the actor a decade ago. About the same time, the Oscar winner found kryptonite in his mailbox.
The IRS just sent the financially strapped screen star a $624,934 bill for delinquent federal taxes, according to public records.
If this level of irony doesn’t cause you to believe in some kind of benevolent god, then I feel sorry for you.
Richard Grassano is a CPA in Athens, Tennessee who just so happens to also be a gun shop owner. At some point in his 35 years as CPA, Mr Grassano noticed that during the traditional tax season he also saw a bump in gun sales at his gun shop (that just so happens to be next door to his office, in the same building). Being a savvy CPA, Grassano saw an opportunity:
All American is advertising tax preparation services along with a bonus gift card for use at the neighboring gun shop. The gift cards range from $5 to $25 based on the amount of the tax return. Grassano said he’s noticed that gun and ammo sales pick up every year around the time people get their tax returns. Tax season also is the busiest time of the year for his accounting business. “It’s cross-marketing,” he said. “We were looking for a way to tap into that increase in business that occurs every year around this time.”
Clearly Grassano knows that tapping into Americans’ distaste for taxes is a great opportunity for his gun business. Regardless if a client receives a refund or not, the mere idea of having to comply with the tax law and the IRS can send some people into a frenzy. A frenzy that may just cause someone to want to shoot something. So gift cards are a natural catalyst to help these people satisfy their desire for a little Remington steel.
But Grassano’s also no dummy when it comes to being familiar with his surroundings:
Athens, with the highest per capita number of concealed carry permits of any municipality in the state, according to the Memphis Commercial Appeal database, is obviously a great location for a gun shop. “I’ll have little old ladies walk in here, put an old pistol on the counter and say, ‘I don’t know what kind of bullets this gun takes, but can you get me a box?’ “Grassano said.
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.
It wouldn’t be tax day (in form, if not necessarily in substance) if the Raisin Bran™ of celebrity tax delinquents, Robert Snell, didn’t have a scoop today.