NBC News is reporting that dozens of federal IRS and DEA agents swarmed the Oaksterdam medical marijuana dispensary and education centers operated by Richard Lee of San Francisco Tuesday.
Some might wonder why IRS agents are running around in commando gear raiding peaceful pot dispensaries, but to those familiar with the movement, the IRS's involvement in shutting down peaceful voluntary businesses such as Oaksterdam goes far back.
Before the Supreme Court decided that the federal government could regulate any and all aspects of human behavior, it has limited powers. The courts ruled that the government could not directly declare various voluntary interactions to be illegal on a whim; instead, the courts limited the federal state to implementing taxes, which is how the first marijuana prohibition came about. Remember, it took a Constitutional amendment to make the production of drinking alcohol a crime, which shows you just how far the court has veered from its past role.
The first ban on dried flowers came about when the government mandated that all cannabis that was produced or sold be affixed with a tax stamp. The catch being that obtaining one of the stamps was next to impossible and that the penalties for selling marijuana without a stamp were wildly excessive (up to 5 years in prison, which is still less than the federal narcotics penalties that apply today). The IRS was also responsible for the prosecution of Al Capone for his bootlegging during prohibition. Capone went down for tax evasion on illicit profits.
Because the production of marijuana is illegal, dispensaries often try to hide or mask their suppliers in their finances so that in the event they are shut down, their sources are protected. I'm sure the IRS is in there digging for any links to growers who might not have been properly reported in tax statements. Further, the federal tax code is around 14,000 pages in total and a slip up on just one of those regulations may be enough to send Richard Lee to prison for a very long time.
Of course, the tax code is just one place Lee might have screwed up (at least according to the government). The 2011 federal register is over 80,000 pages long; which, taken in conjunction with all the other federal registers, creates a situation where practically anything and everything is illegal in some way. Given that all of Oaksterdam's accounting data and products were seized, the IRS is likely to find creative ways to put those millions of pages of law to bad use.
When I see people being thrown in jail for selling dried flowers, I have to wonder if the people doing the "throwing" feel good about themselves at the end of the day. Do they think about the unending misery of the people they just put in prison? Probably not. I suppose they reason to themselves that destroying millions of lives through the legal system is better than pot destroying millions of lives from its consumption. Of course, only a moron would believe that.