Standing Akimbo v. United States

Appellate Case: 21-1379 Document: 010110804696 Date Filed: 01/27/2023 Page: 1
FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT January 27, 2023
_________________________________
Christopher M. Wolpert
Clerk of Court
STANDING AKIMBO, INC., a Colorado
corporation; SPENCER KIRSON;
SAMANTHA MURPHY; JOHN
MURPHY,

Petitioners - Appellants,
No. 21-1379
v. (D.C. No. 1:18-MC-00178-PAB-KLM)
(D. Colo.)
UNITED STATES OF AMERICA,
through its agency the Internal Revenue
Service,

Respondent - Appellee.
_________________________________

ORDER AND JUDGMENT*
_________________________________

Before EID, BALDOCK, and CARSON, Circuit Judges.
_________________________________

Here, we consider the latest battle in the war between Colorado licensed marijuana

dispensaries and the Internal Revenue Service (IRS) over the latter’s access to third-party

held information related to its audits of the dispensaries and their owners. We are no

strangers to this subject, having addressed it in one form or another no less than six times

already. See, e.g., Green Sol. Retail, Inc. v. United States, 855 F.3d 1111 (10th Cir. 2017);

Alpenglow Botanicals, LLC v. United States, 894 F.3d 1187 (10th Cir. 2018); Feinberg v.

*
This order and judgment is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive
value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellate Case: 21-1379 Document: 010110804696 Date Filed: 01/27/2023 Page: 2

Commissioner, 916 F.3d 1330 (10th Cir. 2019); High Desert Relief, Inc. v. United States,

917 F.3d 1170 (10th Cir. 2019); Standing Akimbo, LLC v. United States, 955 F.3d 1146

(10th Cir. 2020) (“Standing Akimbo I”); Speidell v. United States, 978 F.3d 731 (10th Cir.

2020). In keeping with those previous treatments, we exercise jurisdiction pursuant to 28

U.S.C. § 1291 and AFFIRM the district court’s judgment.

I.

The facts of this case are well known to both us and the parties. Accordingly, we

only summarize those facts essential to our disposition. Standing Akimbo, Inc.1 is a

Colorado-licensed marijuana dispensary owned by Spencer Kirson, Samantha Murphy,

and John Murphy (we refer to Standing Akimbo and its owners as the “Taxpayers”). The

Internal Revenue Code prohibits such enterprises from taking deductions for business

expenses. See 26 U.S.C. § 280E.2 As part of its efforts to enforce the tax code, the IRS

began investigating the Taxpayers’ tax filings to determine if they had taken deductions in

violation of § 280E. This investigation led the IRS to audit the Taxpayers for the 2014,

1
Standing Akimbo, Inc. was previously known as Standing Akimbo, LLC. It changed to
Standing Akimbo, Inc. in the 2016 tax year. See Appellee’s Br. at 2 n.1. We refer to both
as “Standing Akimbo.”
2
Section 280E provides:

No deduction or credit shall be allowed for any amount paid or incurred
during the taxable year in carrying on any trade or business if such trade or
business (or the activities which comprise such trade or business) consists of
trafficking in controlled substances (within the meaning of schedule I and II
of the Controlled Substances Act) which is prohibited by Federal law or the
law of any State in which such trade or business is conducted.
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2015, and 2016 tax years. The IRS requested documents from the Taxpayers to

substantiate their filings. When the IRS found the Taxpayers’ responses insufficient, it

issued summonses to the Colorado Marijuana Enforcement Division (MED) seeking

reports from its Marijuana Enforcement Tracking Reporting and Compliance system

(METRC). The Taxpayers petitioned the district court to quash these summonses in two

separate actions—the first addressing the summonses for the 2014 and 2015 tax years and

the second addressing the summons for the 2016 tax year. In the first action, the district

court denied the Taxpayers’ petition to quash and we resolved the Taxpayers’ appeal

arising out that case in favor of the IRS. See Standing Akimbo I, 955 F.3d 1146. The

present action pertains only to the summonses the IRS sent MED for reports relating to the

Taxpayers’ 2016 filings.

The IRS issued the summonses in question in September 2018. The first summons

directed MED to provide a complete list of Standing Akimbo’s licenses for 2016 as well

as METRC’s 2016 annual gross sales report, 2016 transfer reports, 2016 annual harvest

reports, and 2016 monthly plants inventory reports for Standing Akimbo. The second and

third summonses instructed MED to provide a complete list of all licenses held by Spencer

Kirson, John Murphy, and Samantha Murphy in their individual capacities.

The Taxpayers responded before MED complied by filing a petition to quash the

summons in the district court in accordance with 26 U.S.C. § 7609(b). Such proceedings

follow “a familiar framework.” Standing Akimbo I, 955 F.3d at 1154 (citation omitted).

First, the IRS must make a threshold showing that it has not referred the matter to the

Department of Justice for prosecution. Id. (citation omitted). Second, the IRS must meet

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the “slight” burden of demonstrating its “good faith in issuing the summons” by satisfying

the four-factor test established in United States v. Powell, 379 U.S. 48 (1964). Standing

Akimbo I, 955 F.3d at 1155; United States v. Stuart, 489 U.S. 353, 359 (1989). Those

factors require the IRS to show (1) “that the investigation will be conducted pursuant to a

legitimate purpose;” (2) “that the inquiry may be relevant to the purpose;” (3) “that the

information sought is not already within the [IRS’s] possession;” and (4) “that the

administrative steps required by the Code have been followed.” Powell, 379 U.S. at 57–

58. If the IRS can make this showing, usually through an affidavit from the agent issuing

the summons, it establishes the prima facie validity of the summons. Standing Akimbo I,

955 F.3d at 1155. Thereafter, the burden shifts to the taxpayer who must meet the “heavy

burden” of “factually refut[ing] the Powell showing or factually support[ing] an affirmative

defense.” Id. (citation omitted).

The Taxpayers offered three primary lines of attack on the summonses. First, they

asserted the IRS could not satisfy the four-factor test laid out in Powell for establishing the

requisite showing for enforcing the summonses. Second, the Taxpayers claimed the

summonses lacked good faith and abused process. Third, they asserted various

constitutional violations relating to the summonses.

The IRS moved to dismiss the Taxpayers’ petition and asked the district court to

enforce the summons pursuant to 26 U.S.C. §§ 7604(a) and 7609(b)(2)(A).3 To support

3
MED did not intervene in this action. Instead, MED informed the district court that it had
not responded to the IRS’s summonses but would comply with any order issued by the
district court.
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that motion, the IRS provided an affidavit from the agent assigned to audit the Taxpayers

explaining the purpose of the IRS’s investigation and the relevance of the METRC reports

to it. The IRS argued this affidavit satisfied the requirement that it establish the prima facie

validity of the summonses. See Anaya v. United States, 815 F.2d 1373, 1377 (10th Cir.

1987). The IRS further asserted that the Taxpayers’ arguments failed to carry their “heavy

burden” to show that the IRS lacked good faith or that enforcing the summonses would be

an abuse of process. See id. at 1377–78. The motion to dismiss was fully briefed in

February 2019 but remained pending until September 2021.

During the lengthy time the IRS’s motion was pending, we decided Standing

Akimbo I. See 955 F.3d 1146. Thereafter, the Taxpayers petitioned the Supreme Court for

certiorari in that case. Although the Supreme Court denied the Taxpayers’ petition, Justice

Thomas authored a brief statement expressing his doubts on the integrity of Gonzales v.

Raich, 545 U.S. 1 (2005) and Congress’s authority to regulate the intrastate growth of

marijuana. Standing Akimbo, LLC v. United States, 141 S. Ct. 2236 (2021) (Statement of

Thomas, J. on denial of certiorari) (“Standing Akimbo I Statement”). The Taxpayers seized

upon Justice Thomas’s statement and attempted to add it to the arguments presented to the

district court on the IRS’s motion to dismiss, even though the motion was already fully

briefed. The IRS in turn moved to strike the Taxpayers’ submission of Justice Thomas’s

statement as supplemental authority.

The district court resolved each of these issues in its order granting the IRS’s motion

to dismiss. See Standing Akimbo, Inc. v. United States, No. 18-mc-00178-PAB, 2021 WL

3931224, (D. Colo. Sept. 2, 2021) (“Standing Akimbo II”). Recognizing the need to

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consider submissions beyond the pleadings, the district court converted the IRS’s motion

to dismiss into a motion for summary judgment as allowed by Fed. R. Civ. P. 12(d). See

id. at *2. The district court found the IRS had “met its burden under Powell to show a

prima facie case.” Id. at *5. The district court went on to reject the Taxpayers’ arguments

about lack of good faith and process, noting the Taxpayers had “not presented factual

support for their claims” and “failed to show a material issue of disputed fact” to carry their

burden in the face of the IRS’s prima facie showing. Id. at *9. As for Justice Thomas’s

statement, the district court concluded it “ha[d] no bearing on the Court’s analysis” because

the statement was non-precedential and Tenth Circuit precedent controlled the case. Id.

The district court therefore “decline[d] to consider a new argument raised for the first time

in supplemental authority based on no change in precedent.” Id. (citing Hooks v. Ward,

184 F.3d 1206, 1233 n.25 (10th Cir. 1999)).

Accordingly, the district court granted the IRS’s motion to dismiss and ordered the

summonses be enforced. This appeal followed.

II.

Now before us, the Taxpayers present three overarching arguments. First, the

Taxpayers allege the district court committed reversible error when it converted the IRS’s

motion to dismiss into a motion for summary judgment without providing them with

sufficient notice and when it elected not to hold an evidentiary hearing. Appellants’ Br.

14–16. Second, the Taxpayers argue the district court erred when it declined to consider

Justice Thomas’s statement as supplemental authority. Id. at 18–19. Finally, the Taxpayers

claim the summonses should have been dismissed because the IRS lacked a “legitimate

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purpose” in issuing them and therefore failed to meet its burden under Powell. Id. at 23–

27, 29–35. We address each argument in turn.

A.

We begin by considering the Taxpayers’ arguments pertaining to the first set of

alleged procedural errors. District courts are obligated to treat a motion to dismiss as a

motion for summary judgment whenever “matters outside the pleadings are presented to

and not excluded by the court.” Fed. R. Civ. P. 12(d). “All parties must be given a

reasonable opportunity to present all material that is pertinent to the motion.” Id. We

review the “district court’s decision to consider evidence beyond the pleadings and convert

a motion to dismiss to a motion for summary judgment” for abuse of discretion. Bryce v.

Episcopal Church in the Diocese of Colo., 289 F.3d 648, 654 (10th Cir. 2002) (citing Lowe

v. Town of Fairland, 143 F.3d 1378, 1381 (10th Cir. 1998)). The Taxpayers present a

barebones argument on this front. Citing Rule 12(d) and one of our precedents reinforcing

the notice requirement, the Taxpayers summarily contend “the lower court failed to provide

notice and allow the Appellant’s [sic] sufficient time to meet the factual allegations.”

Appellants’ Br. 16 (citing Fed. R. Civ. P. 12(d); Nichols v. United States, 796 F.2d 361,

364 (10th Cir. 1986)). But the Taxpayers’ argument fails for two independent reasons.

First, while “[w]e have held that failure to provide adequate notice that a motion to

dismiss is to be treated as a motion for summary judgment is reversible error,” Bldg. &

Constr. Dep’t v. Rockwell Int’l Corp., 7 F.3d 1487, 1496 (10th Cir. 1993) (citing Franklin

v. City Abstract & Title Co., 584 F.2d 964, 967 (10th Cir. 1978)), we have also recognized

that the notice requirement can be waived “[u]nder [the] proper circumstances.” Prospero

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Assocs. v. Burroughs Corp., 714 F.2d 1022, 1024 (10th Cir. 1983) (quoting Mustang Fuel

Corp. v. Youngstown Sheet & Tube Co., 480 F.2d 607, 608 (10th Cir. 1973)). One such

circumstance is when the aggrieved party was the first “to point out to the district court that

defendants’ 12(b)(6) motion was in fact a motion for summary judgment.” Rockwell, 7

F.3d at 1496. Here, the Taxpayers responded to the IRS’s motion to dismiss by asking the

district court “convert the Motion to Dismiss to a Motion for Summary Judgment” and

arguing that “[a]t the very minimum, the standard of review should be one of summary

judgment.” We believe these statements are sufficient to waive the notice requirement.

See Rockwell, 7 F.3d at 1496.

Second, our decision in Standing Akimbo I required the district court to convert the

IRS’s motion to dismiss into a motion for summary judgment. See 955 F.3d at 1155–56.

In Standing Akimbo I, we recognized that when the IRS moves to dismiss a petition to

quash a summons and has to establish a prima facie case under Powell, the district court is

obligated to consider materials outside the pleadings, such as the affidavits of IRS agents.

Id. at 1155. Accordingly, we held that “the IRS’s motion to dismiss ‘must be treated as

one for summary judgment under Rule 56.’” Id. (quoting Fed. R. Civ. P. 12(d)). We

further noted that the district court erred, albeit not reversibly, by failing to convert the

motion to dismiss into a motion for summary judgment in Standing Akimbo I. Id. at 1155–

56. We cannot conclude that the district court abused its discretion by converting the

motion to dismiss into a motion for summary judgment here when our precedents

effectively deprive the district court of its discretion in instances like this. Further, the

Taxpayers’ extensive involvement and intimate familiarity with Standing Akimbo I

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undercuts any claim that they were unaware of the need to treat the IRS’s motion to dismiss

as a motion for summary judgment and respond accordingly.4 Therefore, the district court

did not err by converting the motion to dismiss or failing to provide the Taxpayers with

sufficient notice.

Similarly, the Taxpayers suggest in the portion of their brief addressing the standard

of review that the district court erred when it elected not to hold an evidentiary hearing

before ruling on the IRS’s motion to dismiss. See Appellants’ Br. 14–15. The decision of

“[w]hether to allow an evidentiary hearing in a summons proceeding is left to the discretion

of the district court.” Villareal v. United States, 524 F. App’x 419, 424 (10th Cir. 2013)

(unpublished) (citing Tiffany Fine Arts, Inc. v. United States, 469 U.S. 310, 324 n.7 (1985)).

The Taxpayers point us to United States v. Security Bank & Trust Co., 661 F.2d 847, 850

(10th Cir. 1981) to support their argument that the district court should have granted them

an evidentiary hearing. There, we acknowledged that the Supreme Court’s recognition of

certain affirmative defenses to the enforcement of summonses—namely those pertaining

to the IRS’s intention to refer a case for criminal prosecution or otherwise facilitate it—

meant the Supreme Court “must have envisioned at least limited discovery” in summons

proceedings because they depended “on information peculiarly within the knowledge or

files of the [IRS].” Id. at 850.

4
In fact, the Taxpayers argued in Standing Akimbo I that the district court erred because it
had not converted the motion to dismiss into one for summary judgment. See 955 F.3d at
1156 n.5.
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But there is a difference between contemplating the potential availability of

discovery and establishing an entitlement to it. Our more recent precedents make clear that

there is no such entitlement and that taxpayers must clear significant hurdles to obtain an

evidentiary hearing at all. We have specifically stated that a taxpayer must meet the “heavy

burden” of “factually refut[ing] the Powell showing or factually support[ing] an affirmative

defense” and that “a hearing may be granted only if the burden is met.” Standing Akimbo

I, 955 F.3d at 1155 (citation omitted) (emphasis added). That burden is satisfied “by

affidavit.” United States v. Balanced Fin. Mgmt., Inc., 769 F.2d 1440, 1444 (10th Cir.

1985) (quoting United States v. Garden State Nat’l Bank, 607 F.2d 61, 71 (3d Cir. 1979)).

Here, the Taxpayers filed no affidavits containing the information necessary to meet their

burden. That failure ends the conversation. The district court did not abuse its discretion

by denying the Taxpayers an evidentiary hearing.

B.

We next consider the district court’s decision to disregard Justice Thomas’s

statement on the denial of certiorari in Standing Akimbo I. In the district court proceedings,

the Taxpayers attempted to supplement their response to the IRS’s motion to dismiss with

additional authorities—including Justice Thomas’s statement—after that motion had been

fully briefed, but before it was decided. The IRS moved to strike those filings and the

Taxpayers moved for leave to file the supplemental authority. The district court

disregarded “[t]his flurry of filings” because Justice Thomas’s statement was not

precedential and Tenth Circuit precedent controlled the case. Standing Akimbo II, 2021

WL 3931224, at *9.

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The Taxpayers contend the district court erred when it denied their motion for leave

to file supplemental authority and elected to disregard Justice Thomas’s statement because

they were permitted to file supplemental authority under the district court’s Local Rule

7.1(f). Appellants’ Br. 18–19. We review decisions relating to the district court’s

supervision of litigation and management of its docket—such as the denial of a motion for

leave to submit supplemental authority—for abuse of discretion. See Beaird v. Seagate

Tech., Inc., 145 F.3d 1159, 1164 (10th Cir. 1998); Johnny Blastoff, Inc. v. L.A. Rams

Football Co., 188 F.3d 427, 439 (7th Cir. 1999).

The Taxpayers’ reliance on the district court’s Local Rule 7.1(f) is unavailing.

Local Rule 7.1(f) states “[i]f the matter is set for hearing, any supplemental authority shall

be filed no later than seven days before the hearing.” D.C.COLO.LCivR. 7.1(f) (emphasis

added). The Taxpayers believe they satisfied Local Rule 7.1(f) because they filed their

supplemental authority “at least seven days before hearing.” Appellants’ Br. 19. But the

Taxpayers concede that “a hearing was not set” in the matter at the time they submitted

their supplemental authority. Id. As a result, the plain language of Local Rule 7.1(f) clearly

forecloses the Taxpayers’ argument.

We further conclude the district court did not abuse its discretion to deny the

Taxpayers’ motion and disregard Justice Thomas’s statement for two additional reasons.

First, Justice Thomas’s arguments were available to the Taxpayers before he authored his

statement. In his statement on the denial of certiorari, Justice Thomas questioned whether

changes in the federal government’s policy towards marijuana undermined the reasoning

of Gonzales v. Raich. Standing Akimbo I Statement, 141 S. Ct. at 2238. This idea was

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fully available to the Taxpayers when they responded to the IRS’s motion to dismiss—if

they had raised it timeously. But they did not. And district courts do not err when they

decline to consider “eleventh-hour” filings on matters that could have been raised

timeously. E.g., Monfore v. Phillips, 778 F.3d 849, 853 (10th Cir. 2015) (Gorsuch, J.).

This principle holds true here.

Second, the district court correctly concluded Justice Thomas’s statement was not

precedential. We have noted that “no precedential conclusion can be drawn from the denial

of certiorari or the statements made by dissenting justices.” United States v. Mitchell, 783

F.2d 971, 977 n.5 (10th Cir. 1986). And while we consider the Supreme Court’s dicta

persuasive authority, Justice Thomas’s statement is not even dicta because it forms no part

of a decision of the Court. See United States v. Serawop, 505 F.3d 1112, 1122 (10th Cir.

2007); Rohrbaugh v. Celotex Corp., 53 F.3d 1181, 1184 (10th Cir. 1995). Accordingly,

the district court did not abuse its discretion by declining to consider this authority.

C.

Finally, we consider whether the IRS carried its “slight” burden of demonstrating a

“legitimate purpose” behind the summonses. See Standing Akimbo I, 955 F.3d at 1155.

The Taxpayers offer two constitutional arguments to support their position that the IRS

lacked a legitimate purpose in issuing the summonses. The first relies almost exclusively

on Justice Thomas’s statement and the second arises under the Sixteenth Amendment.

Appellants’ Br. at 20–27, 29–35.

As a threshold matter, the IRS contends we need not address these arguments at all

because they cannot “shoehorn their constitutional challenges into the Powell framework.”

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Appellee’s Br. at 26. The IRS offers several procedural avenues for reaching that

conclusion.5 But this is one of those rare situations where resolving the merits is more

straightforward than wading into a procedural morass at the Government’s invitation. So,

we proceed to the merits of the Taxpayers’ arguments.

1.

The Taxpayers first argue the IRS lacked a legitimate purpose under Powell

because, per Justice Thomas’s statement, the Controlled Substance Act’s regulation of

marijuana is unconstitutional. Appellants’ Br. at 23–27. Although the Taxpayers

contended the IRS lacked a legitimate purpose before the district court, they did so based

on a different legal theory. As such, the IRS believes we should review this argument for

5
The IRS argues the Anti-Injunction Act, 26 U.S.C. § 7421(a) bars the Taxpayers from
raising their constitutional arguments. Appellee’s Br. at 27–28. Because the Anti-
Injunction Act is jurisdictional, we are obligated to consider it. See Green Solution Retail,
855 F.3d at 1114; Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). The IRS supports its
contention that the Anti-Injunction Act bars these claims by quoting Green Solution Retail,
855 F.3d 1111. There, we concluded that a “lawsuit seek[ing] to enjoin the IRS from
obtaining information related to its initial findings that [a dispensary] is . . . ineligible for
deductions under § 280E” was barred by the Anti-Injunction Act. Green Sol. Retail, 855
F.3d at 1114, 1121. The IRS believes “[t]here is no reason that a materially similar pre-
enforcement challenge to Section 280E should fare differently because it is made in the
context of a summons enforcement proceeding.” Appellee’s Br. at 28. The IRS is
mistaken. In our view, the difference in procedural context between this case and Green
Solution Retail make them materially different. In Green Solution Retail, the taxpayers
were actually trying to enjoin the IRS from obtaining records while in this case the
Taxpayers are contending that the IRS cannot meet its burden under Powell. Compare
Green Sol. Retail, 855 F.3d at 1114, 1121, with Standing Akimbo II, 2021 WL 3931224.
We will not extend the Anti-Injunction Act to summons proceedings—not least of which
because such an extension would directly conflict with (and possibly moot) the statutory
scheme entitling taxpayers to challenge summonses in the district court. The IRS should
be intimately familiar with that statutory scheme because it is reproduced on all the notices
it issues to taxpayers.
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plain error. Appellee’s Br. at 31. But because the Taxpayers’ argument clearly fails even

under a de novo standard, we need not determine whether the plain error standard applies.

The Taxpayers’ argument that the IRS lacked a legitimate purpose because

Congress lacks the authority to regulate their marijuana dispensary is misplaced. The

Supreme Court resolved this question more than fifteen years ago when it decided Gonzales

v. Raich. The non-precedential statement of a single justice on the denial of certiorari—

however esteemed he may be—does not call the integrity of that decision into question.

Gonzales v. Raich is the law. If the Taxpayers believe, as they have represented to us, that

“Standing Akimbo I was very close to being accepted for review,” Appellants’ Br. at 6,

then they are welcome to petition the Supreme Court for certiorari again. But we want to

be very clear: We will continue to faithfully apply Gonzales v. Raich unless the Supreme

Court instructs us otherwise. The Taxpayers cannot show the IRS lacked a legitimate

purpose based on Justice Thomas’s statement.6

6
The Taxpayers argue the summonses are invalid because they violate procedural due
process. Appellants’ Br. at 27–28. The Taxpayers’ argument on this issue is cursory. They
claim, without meaningful substantiation, that “[t]he taking of property is involved, as the
Government seeks to take money, take the petitioners [sic] documents and other
information, and potentially the business itself.” Id. at 28. The Taxpayers also erroneously
cite Justice Thomas’s statement as stating that “this summons process is more ‘episodic
than coherent’” when Justice Thomas actually described the Federal Government’s
enforcement of the laws prohibiting the sale and distribution of marijuana as “more
episodic than coherent.” Id.; Standing Akimbo I Statement, 141 S. Ct. at 2238. In any
event, we will not conclude that statutorily mandated summons proceedings applying
standards set forth by the Supreme Court are a violation of procedural due process.
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2.

Lastly, the Taxpayers argue the IRS did not have a legitimate purpose when it issued

the summonses because § 280E is unconstitutional under the Sixteenth Amendment. The

Taxpayers base this argument on a footnote in Justice Thomas’s statement. See Appellants’

Br. at 29; Standing Akimbo I Statement, 141 S. Ct. at 2238 n.6. We have already made

clear that Justice Thomas’s statement is non-precedential. What is precedential, however,

are the opinions from our Court holding that § 280E does not violate the Sixteenth

Amendment. See Alpenglow Botanicals, LLC, 894 F.3d at 1202 (“Congress’s choice to

limit or deny deductions for these expenses under § 280E does not violate the Sixteenth

Amendment”); Standing Akimbo I, 955 F.3d at 1157 n.7 (“We agree . . . that § 280E falls

within Congress’s authority under the Sixteenth Amendment to establish deductions.”

(citation omitted)). Given this authority, we have little difficulty rejecting the Taxpayers

claim that the IRS cannot establish a legitimate purpose because § 280E is unconstitutional.

III.

For the foregoing reasons, we reject the Taxpayers’ arguments and AFFIRM the

district court’s judgment.

Entered for the Court

Bobby R. Baldock
Circuit Judge

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