DENVER – The Internal Revenue Service has been in the news in recent months for a lot of bad things, including targeting conservatives, harassment and even improperly deleting important emails and possibly lying about it.

But a new court case filed in Denver goes far beyond even that.

It was filed by a company that is protesting the penalties the IRS is imposing for paying the company’s taxes.

On time.

And in full.

The problem? The payments were in cash.

According to the Denver Post, the case was brought by medical marijuana dispensary Allgreens LLC.

The report explains that the IRS is assessing a 10 percent penalty on the federal employee withholding taxes submitted by the company because the company isn’t following the IRS rules that require such submissions electronically.

That’s because banks won’t set up bank accounts for marijuana businesses due to the fact that the business still is illegal under federal law. It’s only allowed under state law.

And while the Obama administration has decided simply not to prosecute such violations of federal law, the next administration could decide to prosecute.

The lawsuit charges the penalty is unfair, arguing the company submitted its payments on time, in full and in cash only because it cannot submit payments electronically.

The IRS had advised the company to use a third party to deliver the money, but Allgreens argued in its court filing that that method would amount to money laundering.

“It was not that the taxpayer ‘did not want’ to make use of the [Electronic Federal Tax Payment System’,” Allgreens attorney Rachel Gillette explained. “Rather, the taxpayer is unable to secure a bank account due to the nature of its business. With no bank account and no access to banking services, the taxpayer is simply incapable of making {the payments electronically.”

The business has been hand-delivering the cash payments to the IRS in Denver twice monthly, but the feared federal agency now says Allgreens owes more than $20,000 in penalties, the Post said.

“Despite their best efforts, they simply cannot comply with the law,” Gillette told the Post, “Why should they be taxed differently simply because they cannot follow a restrictive rule? And the alternatives the IRS suggests are criminal.”

Gillette notes the Denver IRS office is the only one that accepts cash, and business owners not close to Denver have to make day-long trips for the payments.

And, Gillette said, “You can only do it by appointment.”

In 2012, Colorado and Washington became the first states to pass a law legalizing recreational use of marijuana. However, federal law remains untouched.

The banking industry isn’t the only community with concerns about the conflict between an activity legal under state law and illegal under federal law. WND reported several months ago the conflict may also be a concern to gun sellers and owners.

It’s because White House drug czar Gil Kerlikowske recently told the National Press Club there is a zero-tolerance policy regarding drugs.

The administration, through the website for the Office of National Drug Policys, warns: “Marijuana and other illicit drugs are addictive and unsafe especially for use by young people. … Marijuana contains chemicals that can change how the brain works. And the science, though still evolving in terms of long-term consequences of marijuana use, is clear: marijuana use is associated with addiction, respiratory and mental illness, poor motor performance, and cognitive impairment, among other negative effects.”

Why, then, hasn’t the Obama administration launched legal action against Colorado and Washington?

After all, the White House has been more than emphatic that state laws exempting people from the federal Obamacare law are invalid. And when Arizona adopted a state law to enforce federal immigration restrictions, Washington immediately sued.

Some critics wonder if there is something about legalizing marijuana that Washington likes. That seemingly strange idea may have been borne out when the Congressional Research Service released its report on the “State Legalization of Recreational Marijuana: Selected Legal Issues.”

As attorneys Todd Garvey and Brian Yeh wrote in the report, Washington has flexibility regarding drug prosecution, stating: “The extent to which federal authorities will actually seek to prosecute individuals who are engaged in marijuana-related activities in Colorado and Washington remains uncertain. President Obama himself has suggested the prosecuting simple possession is not a priority, while the Department of Justice has said only that ‘growing, selling or possession any amount of marijuana remains illegal under federal law.'”

But what is certain, they wrote, is that federal firearms regulators will be aggressive about banning anyone who uses marijuana from buying – or possessing – a weapon.

“With the legalization of marijuana for recreational purposes in Colorado and Washington, it seems likely the ATF will … consider a recreational user of marijuana to be a prohibited possessor of firearms regardless of whether the use is lawful under state provisions,” they wrote.

The attorneys said the ATF specifically has stated “any person who uses or is addicted to marijuana, regardless of whether his or her state has passed legislation authorizing marijuana use for medicinal purposes, is an unlawful user of or addicted to a controlled substance, and is prohibited by federal law from possessing firearms or ammunition.”

They further wrote, “These individuals are to answer ‘yes’ when asked on the firearms transfer form if they are unlawful users of a controlled substance.”

Answering falsely is also a felony, they note.

According to the Denver Post, the CRS report was touted by Rep. Jared Polis, D-Colo., an advocate of legalized marijuana, for saying that while “the federal government may use its power of the purse to encourage states to adopt certain criminal laws … it … is limited in its ability to directly influence state policy by the Tenth Amendment.”

Polis told the Post, “I’ve long believed that Colorado, Washington and other states that have decriminalized or legalized marijuana for personal or medical use have acted within the legal bounds of the law.”

But Obama attacked a state decision to enforce federal immigration standards, so why, as the Post reports, are “Colorado, Washington and 17 other jurisdictions … still holding out for any word from the Department of Justice on whether marijuana possession and distribution – which is illegal under federal law – will be enforced, despite the legalization within local borders.”

Dave Workman, senior editor at, a spokesman with the Second Amendment Foundation and a former member of the NRA board of directors, wrote about the possible solution last fall as the votes in Washington and Colorado were approaching.

“A source with the Bureau of Alcohol, Tobacco, Firearms and Explosives in Washington, D.C., … confirmed what had been explained in a Sept. 21, 2011, letter from Arthur Herbert, assistant director for enforcement programs and services to firearms retailers.

“Washington state gun owners need to know they cannot get stoned and head for the gun range or hunting camp,” he wrote.

A letter from Herbert, at the time, blew out of the water the option for the libertarian concept of unrestricted guns and unrestricted marijuana.

“There are no exceptions in federal law for marijuana purportedly used for medicinal purposes, even if such is sanctioned by state law,” he wrote.

Even selling a gun to someone can catch an owner outside the law.

Workman told WND his assumption is that the Obama administration is hesitant to step on the toes of marijuana users who may support the left-leaning administration.

At the same time, he suggested, with Obama’s agenda for gun rules, regulations, restrictions and requirements looming large, anything that has the potential to trip up a gun owner couldn’t be all bad.

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