Any California history buff will know that it was tax evasion and the Internal Revenue Service that finally put Al Capone behind bars. The IRS was also involved recently in an effort to allegedly shut down a medical marijuana operation in Oakland, California.
According to news sources, IRS agents, together with the U.S. Drug Enforcement Agency and the U.S. Marshall Service agents, were involved in a raid of several Oakland locations. Although the federal agents removed a safe, file cabinets and several black bags of materials, there were no charges of tax fraud, tax evasion, tax collection issues or any criminal charges mentioned. The agents did however have a federal search warrant.
The locations that were raided are reportedly all connected to the founder of Oaksterdam University, a school purportedly dedicated to teaching those interested in the marijuana industry. The university, the founder's apartment and other rental properties were involved in the search, although the purpose of the search was not made known.
Medical marijuana dispensaries are legal in California and reportedly highly regulated. According to a news report, the largest dispensary in Oakland took in $21 million in 2009. That same year, voters in Oakland passed regulations that would tax the sale of cannabis. The same dispensary paid more than $3 million in taxes last year and is currently in litigation with the IRS related to issues with the 2007 and 2008 tax years.
Failure to pay federal taxes carries the potential for penalty fines plus interest. Any business involved in a federal tax audit or investigation by the IRS would be well advised to consult with legal tax professionals for advice and assistance.
Source: SF Gate, "Feds raid Oaksterdam University, founder's home," Matthai Kuruvila, April 3, 2012