CHAMP: How the Tax Court Finessed a Bad Statute

Abstract:     
In Californians Helping to Alleviate Medical Problems, Inc. v. Commissioner (CHAMP), the Tax Court allowed business deductions for the expenses incurred in the sale of marijuana, despite the provisions of Internal Revenue Code Section 280E, which appears to disallow such deductions. This piece commends the Tax Court for finding a way around a bad statute. It then recommends that the statute should be repealed entirely.

Keywords: taxation, marijuana, deductions

JEL Classifications: H25

Accepted Paper Series