Yet another idiot doing taxes

[AmethystSquirrel]

So, I work for "Patriotic Tax Service"

This guy comes in and wants to claim his small business. Ok cool. No big deal.

He grows plants and herbs in his home and sells them.

Supplies list:

UV Lights
Heaters
Small bags for selling
Seeds
Hydroponic System (wanted to depreciate it)
cell phone (to contact customers)
and he wanted to take 10% of his home for business use

We did his return, asked a few questions and we KNOW what he was selling......
So of course we filed it but with notes in the preparers sections. We believe this is an illegal business.


WHO THE HELL TRIES TO CLAIM POT GROWING AND SELLING??????????

[LillFilly]

WHO THE HELL TRIES TO CLAIM POT GROWING AND SELLING??????????

The very types of people who are the reason this site exists!

[Sapphire Silk]

WHO THE HELL TRIES TO CLAIM POT GROWING AND SELLING??????????

Actually, it makes a sort of perverted sense.

Remember, they nailed Al Capone for tax evasion.

[AmethystSquirrel]

Actually, it makes a sort of perverted sense.

Remember, they nailed Al Capone for tax evasion.

True....but still I had to get my preverbal jaw off the floor!

[EvilEmpryss]

Okay, so it's a business. Did he report last year's profits?

[Irving Patrick Freleigh]

Okay, so it's a business. Did he report last year's profits?

He probably spent them all on assorted snack items.

[bainsidhe]

Once he's arrested, do you think he can try to claim back some of those taxes seeing as they're helping support his "new home" in public housing?

[Kogarashi]

WHO THE HELL TRIES TO CLAIM POT GROWING AND SELLING??????????

Someone who's been sampling his own wares?

[BigBird]

I'm surprised he didn't try to claim part of his electric bill too, and of course loss of wages, since most of his profits probably go up in smoke!

[MoonCat]

That takes balls.

So what happens now? IRS makes a call to the police, or what?

[Hyena Dandy]

Damn.

On the one hand, illegal business.

On the other hand, think of it this way. With the deficit in the double digit trillions, would you rather he DIDN'T pay taxes on it?

[AmethystSquirrel]

That takes balls.

So what happens now? IRS makes a call to the police, or what?

Mooncat, not too sure what will happen. Never in all my years doing taxes did I have to report anything like that Illegal.

[csquared]

Are you in California, Colorado or Michigan?

If not, you can always make an anonymous tip to the police.

[taxguykarl]

That takes balls.

So what happens now? IRS makes a call to the police, or what?

The IRS doesn't care how one makes money as long as they pay the tax on it. I did a return for a stripper (prostitute, more likely--she claimed condoms among her expenses) and there were no repurcussions.

[EricKei]

Are you in California, Colorado or Michigan?

Good point ...Just one thing to keep in mind...

Growing said product is still illegal on the Federal level; state laws cannot supercede that. It's just that the Feds have more-or-less agreed to let it slide in states where it has been legalized on the state/local level (put simply, they have bigger fish to fry). There have been cases where a grower of Medicinal "product" did an interview on the local news, without making any attempt to disguise his face or location, and was almost immediately busted/raided by the Feds (arguably as much for his own stupidity as anything else). If a future drug czar decides to actually start enforcing those laws again, I'm afraid all of those shopkeepers will be in serious hoo-hah, no matter what the states say. The only solution would be to have it legalized on the Federal level -- which is improbable, but not impossible.