“This creates significant problems for the IRS,” Mnuchin said at a hearing held by a House Appropriations subcommittee.
Many states have legalized medical or recreational marijuana. However, banks have been hesitant to serve marijuana businesses even in states that have legalized use of the drug because they want to avoid violating federal anti-money laundering and illicit finance laws. That has led to cash-only marijuana businesses.
Lawmakers from both sides of the aisle asked Mnuchin at the hearing about marijuana banking issues.
“I think it’s important Congress continue to iron out these problems as they are an issue of public safety, transparency and accountability,” Joyce said.
Mnuchin declined to take a policy position but said that cash-only businesses create a concern for the IRS.
“We have to build cash rooms to take in large amounts of cash where people owe us taxes, because we want to collect the taxes, and those entities are not banked,” Mnuchin said. “And I would say that creates risk to our IRS employees and to the people in the community.”
Mnuchin also said that when it comes to bank regulators, Treasury’s Financial Crimes Enforcement Network has issued some guidance but that Treasury has “limited abilities within this guidance to direct this issue.”
Without taking a stance on how he thinks the federal-state conflict concerning marijuana should be resolved, Mnuchin urged Congress “to deal with this one way or another.”
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