During a House Appropriations Financial Services and General Government Subcommittee hearing on Tuesday Internal Revenue Service Commissioner Charles Rettig said the agency “would prefer direct deposits more so than receiving actual cash payments.”
Rettig’s comments at the hearing were first reported by Marijuana Moment.
“It’s a security issue for the IRS. It’s a security issue for our employees in our taxpayer assistance centers, [which] is actually where we receive these payments. We created special facilities in the tax to receive the payments. Then we similarly have to transport the payments themselves.” – Rettig, to the House Appropriations Financial Services and General Government Subcommittee, Feb. 23, 2021
Last year, then-Treasury Secretary Steven Mnuchin said cannabis industry cash “creates significant problems” for the IRS and “creates risk” for agency employees and members of the community. He added that the IRS had to build “cash rooms” for cannabis cash. At that time, Mnuchin urged lawmakers to do something “one way or another” to allow the sector baking services and reduce the burden on the IRS and Treasury Department.
Mnuchin’s comments came months after the House passed the SAFE Baking Act, which would allow cannabusinesses to access financial services. The Senate, then led by Republicans, never considered the bill.
Current Treasury Secretary Janet Yellen has not made any statements about cannabis policy and has not announced any cannabis-related reforms since her confirmation last month. During her tenure as Federal Reserve chair from 2014 to 2018 the agency denied Denver, Colorado’s Fourth Corner Credit Union – a non-profit cooperative formed by state-licensed cannabusiness – its application for a master account, forcing the industry to remain all-cash.
The IRS last year released guidance to industry operators, covering cash payments, estimated payments and Section 280E which prevents cannabis businesses from claiming business deductions.
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