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IRS Targeted Pot Non-Profits for Deeper Scrutiny

Maureen Meehan

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IRS Targeted Pot Non-Profits for Deeper Scrutiny

A federal watchdog has has identified as many as 146 cases in which the Internal Revenue Service (IRS) targeted liberal-leaning groups, including non-profits working on medical marijuana issues, for extra scrutiny based on their names or political leanings, reported the Washington Post.

“The IRS identified the medical marijuana organizations for further scrutiny because of concerns that they were engaging in activities that were not permissible under tax-exempt law,” said the treasury inspector general for tax administration (TIGTA) in a review released Thursday.

“Specifically, some states were legalizing the use of medical marijuana, but it was illegal under federal law,” the TIGTA continued, “so the organizations did not meet the requirements for federal tax exemption.”

Eighty-three of those groups were chosen because of the IRS’s selection criteria, which alerts them to groups based on certain terms like “Occupy,” “Medical Marijuana” and “Progressive,” as well as any affiliation with the Association of Community Organizations for Reform Now (ACORN).

According to the report, the “IRS inappropriately selected organizations for scrutiny based on their names or policy positions,” rather than on actual evidence of inappropriate activity.

Many of the organizations that applied for IRS tax-exempt status focus on education around cannabis policy issues and are not involved in touching the plant, according to the Marijuana Moment.

But, because of the IRS’s habit of alerting agency officials based on an organization’s name, some of their applications were unnecessarily delayed and presented with improper requests for information on their donors and activities.

“All of the medical marijuana cases took longer than average to process compared to the IRS’s overall average for non-merit cases in each fiscal year,” the review found.

“We determined that all 10 organizations whose applications we confirmed were processed based on the medical marijuana criterion received letters requesting additional information to complete processing of their application. We reviewed these additional request letters and determined that four of the organizations received a request for information that TIGTA had concluded was unnecessary for processing political advocacy cases in our prior review.”

It is worth noting that the heightened marijuana scrutiny flagged in the document actually occurred during the Obama administration.

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