Quote Originally Posted by killerweed420
You can't file income taxes any way because its illegal and you certainly wouldn't be able to declare the cost of purchasing product.
you don't have to label product purchased and sold on your taxes as "marijuana", and the even if you did, the IRS can only give that info to the DEA through specific federal subpoenas if my memory serves correct. Suffice to say, that even if your "retail sales" were cocaine, you'd have to declare (non specifically) those sales and pay taxes on it, legal or not. Just cause your business might be illegal doesn't mean you don't have to pay taxes on it. Fucked up? yes, but that is the law.

at least that's what ive been told when I ask real lawyers about this stuff.

AFAIK, the reason most dealers get away without paying taxes is because they don't bring in enough cash to raise suspicion, and since they deal with only cash sales, they'd have to bring in a lot for the government to take notice and or prove anything.