“This creates significant problems for the IRS”
Treasury Secretary Steven Mnuchin said Wednesday that the cash-only nature of marijuana businesses poses challenges for the IRS.
“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 Crist.
Rep. David Joyce 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.
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