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Mnuchin details IRS challenges with cash-only marijuana businesses

Mnuchin details IRS challenges with cash-only marijuana businesses
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"This creates significant problems for the IRS," Mnuchin said at a hearing held by a House Appropriations subcommittee.
 
Many states have legalized medical or recreational marijuana. However, banks have been hesitant to serve marijuana businesses even in states that have legalized use of the drug because they want to avoid violating federal anti-money laundering and illicit finance laws. That has led to cash-only marijuana businesses.
 
Lawmakers from both sides of the aisle asked Mnuchin at the hearing about marijuana banking issues.
 
"I'm hearing from financial institutions large and small alike that they still face uncertainty over whether they can provide financial services to legally operating marijuana businesses," said Rep. Charlie CristCharles (Charlie) Joseph CristFlorida Democrat introduces bill to recognize Puerto Rico statehood referendum Anna Paulina Luna wins Florida GOP primary in bid to unseat Charlie Crist The feds should not spend taxpayer dollars in states that have legalized weed MORE (D-Fla.).
 
Rep. David JoyceDavid Patrick JoyceCandymakers meet virtually with lawmakers for annual fly-in, discuss Halloween safety Stand-alone bill to provide relief for airlines blocked on House floor Republicans shrug off Kasich's Democratic convention speech MORE (R-Ohio) asked Mnuchin if the Treasury Department would keep the Appropriations Committee informed about the challenges it faces on the cannabis banking issue.
 
"I think it's important Congress continue to iron out these problems as they are an issue of public safety, transparency and accountability," Joyce said.
 
Mnuchin declined to take a policy position but said that cash-only businesses create a concern for the IRS.
 
"We have to build cash rooms to take in large amounts of cash where people owe us taxes, because we want to collect the taxes, and those entities are not banked," Mnuchin said. "And I would say that creates risk to our IRS employees and to the people in the community."
 
Mnuchin also said that when it comes to bank regulators, Treasury's Financial Crimes Enforcement Network has issued some guidance but that Treasury has "limited abilities within this guidance to direct this issue."
 
In September, the House passed a bipartisan bill aimed at giving banks legal cover to serve the cannabis industry, but Senate Banking Committee Chairman Mike CrapoMichael (Mike) Dean CrapoBarrett says she did not strike down ObamaCare in moot court case GOP Sen. Thom Tillis tests positive for coronavirus 22 GOP attorneys general urge Congress to confirm Barrett as Supreme Court justice MORE (R-Idaho) has raised concerns about the measure.
 
Without taking a stance on how he thinks the federal-state conflict concerning marijuana should be resolved, Mnuchin urged Congress "to deal with this one way or another."
 
Rep. Mark AmodeiMark Eugene AmodeiBipartisan lawmakers call for Postal Service relief Mnuchin details IRS challenges with cash-only marijuana businesses On The Trail: Democrats plan to hammer Trump on Social Security, Medicare MORE (R-Nev.) — who along with Crist and Joyce voted for the House bill in September — said he thinks it's an "incredible irony" that because of the conflict between state and federal laws, "the biggest money launderer of marijuana money, if your state's legalized it, quite frankly are the tax collectors."