No Charitable Exemption for Medical Marijuana Nonprofits

Uncle Bill is a child of the Sixties. He is told you the story many a time how the lead singer for the Zombies stole his Beatle boots when they played at Old Orchard Beach the summer when he was 17. When Bill calls you out of the blue to discuss a hypothetical charitable exemption for medical marijuana nonprofits, you assume his interest is more than simply academic. After all, as Bill describes it, he was a “pharmaceutical rep” in college, which, you have to admit, is the classiest way of admitting that someone was a drug dealer that you’ve ever heard. It’s safe to say that Bill’s “studies” in cannabis goes back decades. Thus, when Maine legalized marijuana in 2016, Bill was as happy as a dog with two tails, and he's been chasing a charitable exemption for medical marijuana ever since. Searching for a Charitable Exemption for Medical…

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BM Construction v. Commissioner
T.C. Memo. 2021-13

On February 8, 2021, the Tax Court issued a Memorandum Opinion in the case of BM Construction v. Commissioner (T.C. Memo. 2021-13). The primary issue presented in BM Construction v. Commissioner was whether the IRS had satisfied its burden to prove that the letter in question was mailed and actually received for CDP purposes. Background to BM Construction v. Commissioner IRC § 3406 requires a payor to deduct and withhold tax from certain payments not otherwise subject to withholding if the payee taxpayer fails to cooperate with the information reporting scheme (e.g., failure to furnish his taxpayer identification number to the payor).  The owner of the company failed to obtain the TIN of certain subcontractors. In an effort to collect the backup withholding tax liability, the IRS issued to the company a Notice of Intent to Levy and Notice of Your Right to a Hearing. In response, the company submitted…