Rejecting the dispensary’s demand for immunity, Charles Butler, a trial attorney in the DOJ’s tax division in Washington, said in court papers filed on Wednesday that the so-called Cole memo—named after Obama-era Deputy Attorney General James Cole—never hindered the IRS from enforcing tax laws.
“Congress, not the Justice Department, sets policy directives,” Butler wrote, “and in any event the Justice Department could ‘displace these memoranda at any time.’”
Butler added: “The department’s action, however, does not mean that petitioners now face an elevated danger of self-incrimination by cooperating with the IRS audits.”
The IRS, fighting in Colorado federal district court, is seeking access to state-held records as part of its investigation into Standing Akimbo’s 2014 and 2015 tax returns. The owners of the dispensary have asked the court to block the summonses the tax agency has issued to Colorado’s Marijuana Enforcement Division for data from its marijuana tracking system.
Standing Akimbo’s owners contend tax agents could share that information with federal prosecutors, putting them at risk of drug charges. That threat was compounded last month, according to the dispensary’s attorney,