FILED
                                                                  United States Court of Appeals
                                      PUBLISH                             Tenth Circuit

                      UNITED STATES COURT OF APPEALS                   February 26, 2019

                                                                      Elisabeth A. Shumaker
                            FOR THE TENTH CIRCUIT                         Clerk of Court
                        _________________________________

 NEIL FEINBERG; ANDREA E.
 FEINBERG; KELLIE McDONALD,

       Petitioners - Appellants,

 v.                                                          No. 18-9005

 COMMISSIONER OF INTERNAL
 REVENUE,

       Respondent - Appellee.
                      _________________________________

                       Appeal from the United States Tax Court
                       (Tax Court Nos. 10083-13 and 10084-13)
                        _________________________________

James D. Thorburn (Richard Walker with him on the briefs), Thorburn Walker LLC,
Greenwood Village, Colorado, for Petitioners–Appellants.

Francesca Ugolini, Tax Division Attorney (Richard E. Zuckerman, Principal Deputy
Assistant Attorney General, Gilbert S. Rothenberg, Tax Division Attorney, and
Nathaniel S. Pollock, Tax Division Attorney, with her on the briefs), Department of
Justice, Washington, D.C., for Respondent–Appellee.
                        _________________________________

Before LUCERO, McHUGH, and MORITZ, Circuit Judges.
                  _________________________________

McHUGH, Circuit Judge.
                    _________________________________


      Neil Feinberg, Andrea Feinberg, and Kellie McDonald (collectively, the

Taxpayers) were shareholders in Total Health Concepts, LLC (THC), a Colorado
company allegedly engaged in selling medical marijuana. After the Taxpayers claimed

THC’s income and losses on their tax returns, the IRS conducted an audit and disallowed

certain deductions under 26 U.S.C. § 280E, which prohibits deductions for businesses

engaged in unlawful trafficking of controlled substances. The IRS then recalculated the

Taxpayers’ tax liability and issued a notice of deficiency for the unpaid balance. The

Taxpayers challenged that determination in the tax court, which affirmed on the basis that

the Taxpayers had failed to substantiate the business expenses.

       Both parties agree the tax court erred by injecting a substantiation issue into this

case not raised in the notice of deficiency, and then placing the burden for refuting that

claim on the Taxpayers. But the Commissioner argues we should affirm on the alternative

ground that the Taxpayers did not meet their burden of proving the IRS’s determination

that THC was unlawfully trafficking in a controlled substance was erroneous. The

Taxpayers disagree and contend placing the burden on them would violate their Fifth

Amendment privilege. Because we conclude allocation of the burden of proof does not

constitute “compulsion” under the Fifth Amendment, and because the Taxpayers have

made no attempt to meet their evidentiary burden, we affirm the tax court on the

alternative ground that § 280E prohibited the deductions.

                                 I.     BACKGROUND

       THC was a Colorado limited liability company organized to “promote the

cultivation and sale of medical marijuana products” and was licensed by Colorado to

operate two medical marijuana dispensaries. App. at 3586–87. Ms. McDonald was a

shareholder for tax years 2009–2011, and Mr. Feinberg, who filed joint tax returns with

                                              2
Ms. Feinberg, was a shareholder for tax years 2010–2011. Because THC elected to be

treated as an S corporation for tax purposes, its income and losses were reported on the

Taxpayers’ individual income tax returns.

       The deficiencies identified by the IRS were in the years in which the Taxpayers

reported THC’s income and losses on their individual returns. These deficiencies were

mostly attributable to income adjustments the IRS made after determining THC was

ineligible for deductions pursuant to § 280E because THC “operates medical marijuana

dispensaries and marijuana growing facilities,” App. at 41, and was therefore engaged in

a trade or business that “consists of trafficking in controlled substances.” As a result, the

IRS disallowed deductions for business expenses otherwise permitted by the Tax Code.

See 26 U.S.C. § 162(a). During its audit, the IRS also reclassified many of THC’s

claimed business expenses as Costs of Goods Sold (COGS), resulting in their exclusion

from gross income. But because the net upward adjustments to COGS did not exceed the

disallowed deductions for business expenses, THC’s overall taxable income for the

audited years increased.

       The Taxpayers filed a petition with the United States Tax Court seeking

redetermination of the deficiencies. As part of the proceedings, the Taxpayers filed a

motion in limine seeking a ruling that the Commissioner bore the burden of proving

§ 280E applied. Concluding the Taxpayers had the burden of proving § 280E did not

apply, the tax court denied the motion.

       During discovery, the IRS issued a request for information about the nature of

THC’s business. Feinberg v. Comm’r, 

, 814 (10th Cir. 2015) [hereinafter

                                              3
Feinberg I]. The Taxpayers resisted the request and asserted their Fifth Amendment

privilege against self-incrimination. 

The IRS responded by filing a motion

to compel production, which the tax court granted. 

       The Taxpayers next sought to enforce their Fifth Amendment privilege through a

writ of mandamus filed in this court. 

the tax court proceedings “took an

especially curious turn” when the Commissioner sought to compel discovery because

“[i]n tax court, after all, it’s the petitioners who carry the burden of showing the IRS

erred in denying their deductions—and by invoking the privilege and refusing to produce

materials that might support their deductions the petitioners no doubt made their task just

that much harder.” 

denied the writ, concluding the Taxpayers’ Fifth

Amendment privilege could be protected by an appeal in the normal course. 

       After the ruling in Feinberg I, the Commissioner abandoned the discovery request

and instead filed a motion for summary judgment. The tax court denied the motion

because “there [were] material issues of fact in dispute.” App. at 2227. The parties

stipulated that the two issues for trial were (1) whether the Taxpayers have “substantiated

that they should be allowed [COGS] greater than those allowed” by the IRS’s

examination report and (2) whether the IRS “properly disallowed business expense

deductions pursuant to section 280E.” 

       After trial, the tax court concluded the Taxpayers had failed to substantiate higher

COGS. But the tax court refused to consider whether § 280E applied to the business

expenses, concluding instead that the Taxpayers failed to substantiate any of the business

expenses for which the deductions were disallowed. The Taxpayers filed a motion for

                                              4
reconsideration, arguing the tax court should not have relied on the Taxpayers’ failure to

substantiate their expenses because substantiation was not a basis for the IRS disallowing

the deduction. The Commissioner agreed and urged the tax court to consider the § 280E

arguments. The tax court denied the motion for reconsideration, and the Taxpayers

appealed. Exercising jurisdiction pursuant to 26 U.S.C. § 7482(a)(1), we affirm, but on

different grounds than those relied on by the tax court.

                                   II.    DISCUSSION

       We begin our analysis of the issues on appeal with a discussion of the applicable

standard of review. We then pause to provide legal context for our review. Turning next

to the ground on which the tax court relied, we consider whether judgment against the

Taxpayers was warranted by their failure to substantiate their business expenses.

Concluding that it was not, we address the Commissioner’s argument that judgment in its

favor can be affirmed on the alternative ground that the Taxpayers failed to disprove the

applicability of § 280E. In doing so, we reject the Taxpayers’ argument that placing the

burden of proof on them to disprove their business is engaged in the trafficking of a

controlled substance violates their Fifth Amendment right against self-incrimination. And

because the Taxpayers offered no evidence that THC was engaged in a business other

than trafficking, we affirm the tax court’s decision upholding the deficiency.

                                 A. Standard of Review

       “We review Tax Court decisions ‘in the same manner and to the same extent as

decisions of the district courts in civil actions tried without a jury.’” Anderson v. Comm’r,

, 1270 (10th Cir. 1995) (quoting 26 U.S.C. § 7482(a)(1)). Therefore, “[w]e

                                             5
review the Tax Court’s factual findings under the clearly erroneous standard and review

its legal conclusions de novo.” 

Background

       The Sixteenth Amendment grants Congress the power “to lay and collect taxes on

incomes, from whatever source derived.” U.S. Const. amend. XVI. The Internal Revenue

Code differentiates between two types of income: “‘gross income’ and ‘taxable income.’”

Alpenglow Botanicals, LLC v. United States, 

, 1199 (10th Cir. 2018). Gross

income includes “all income from whatever source derived, including . . . [g]ross income

derived from business.” 

U.S.C. § 61(a)). “Congress has the unquestioned

constitutional and statutory authority to tax gross income.” 

ensure taxation

of income rather than sales, the ‘cost of goods sold’ is a mandatory exclusion from the

calculation of a taxpayer’s gross income.” 

on the other hand, “is the taxpayer’s ‘gross income minus the

deductions allowed’ by statute.” 

U.S.C. § 63(a)). For example, businesses

may deduct “all the ordinary and necessary expenses paid or incurred during the taxable

year in carrying on any trade or business.” 26 U.S.C. § 162(a). But deductions “are

matters of legislative grace specifically authorized by statute, and Congress has

unquestioned power to condition, limit, or deny deductions from gross income in arriving

at the net which is to be taxed.” 

–1200 (citations omitted)

(internal quotation marks omitted). One such limitation appears in 26 U.S.C. § 280E,

which prohibits deductions



                                             6
       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.

Despite its legality in many states, marijuana is still a schedule I “controlled substance”

under federal law. 21 U.S.C. § 812(c)(Schedule I)(c)(10); Green Sol. Retail, Inc. v.

United States, 

, 1113 (10th Cir. 2017). And although the Justice

Department did not criminally pursue dispensaries acting in accordance with state law

during the relevant time period, “the IRS . . . show[ed] no similar inclination to overlook

federal marijuana distribution crimes.” 

(internal quotation

marks omitted).

                        C. Substantiation of Business Expenses

       The parties both contend the tax court erred in denying the business expense

deductions for failure to substantiate them under § 162 because the IRS based the

deficiency notice solely on § 280E. We agree.

       A notice of deficiency must “describe the basis for, and identify the amounts (if

any) of, the tax due.” 26 U.S.C. § 7522. In tax court, the petitioner usually bears the

burden of proof, T.C. Rule 142(a), including the burden of proving the IRS incorrectly

determined a deficiency provided in the notice. See Feinberg 

(“[I]t is

the petitioners who carry the burden of showing the IRS erred in denying their

deductions . . . .”). But, if there is a “new matter” raised in the tax court that was not

included in the deficiency notice, the burden is on the respondent. 

theory that


                                               7
is presented to sustain a deficiency is treated as a new matter when it either alters the

original deficiency or requires the presentation of different evidence.” Shea v. Comm’r,

, 191 (1999) (quoting Wayne Bold & Nut Co. v. Comm’r, 

, 507

(1989)).

       Here, the IRS deficiency notice determined THC was engaged in unlawful

trafficking and disallowed its business deductions under § 280E. But the tax court upheld

the deficiency based on THC’s failure to substantiate its business expenses. Because

proving THC was not engaged in unlawful trafficking requires presentation of different

evidence than substantiating the business expenses, the substantiation theory constitutes a

new matter. The burden of proof on that new matter, and thus any failure of proof, falls

on the Commissioner, as the respondent, not on the Taxpayers. As a result, the tax court

erred by affirming the denial of the deductions based on the Taxpayers’ failure to adduce

evidence to substantiate the expenses.

                                    D. Section 280E

       Despite the tax court’s error, the Commissioner argues this court may affirm on

the alternative ground that the Taxpayers failed to meet their burden of proving the IRS

erred in denying the deductions based on § 280E. This court has “discretion to affirm on

any ground adequately supported by the record.” Elkins v. Comfort, 

, 1162

(10th Cir. 2004). “In exercising that discretion [the court] consider[s] whether the ground

was fully briefed and argued here and below, whether the parties have had a fair

opportunity to develop the factual record, and whether, in light of factual findings to




                                              8
which we defer or uncontested facts, [the court’s] decision would involve only questions

of law.” 

(internal quotation marks omitted).

       The Taxpayers do not object to this court deciding the question in the first

instance. But they contend that requiring them to bear the burden of proving the IRS

erred in applying § 280E violates their Fifth Amendment privilege against

self-incrimination. The Taxpayers further argue that if the burden is properly assigned to

the IRS, it must bear the consequences of any failure of proof. The parties presented these

issues both to this court and to the tax court, had a fair opportunity to develop the factual

record, and are not asking this court to make any factual determinations. Therefore, we

will consider on appeal the alternative ground that the deficiency is justified by § 280E.

       To begin, we address the Taxpayers’ contention that requiring them to prove the

IRS erred in applying § 280E violates their Fifth Amendment privilege against

self-incrimination. Concluding the burden does not violate the Fifth Amendment, we next

consider whether the Taxpayers met their burden to prove § 280E is inapplicable.

   Fifth Amendment Challenge

       The Taxpayers claim that assigning them the burden of proving the IRS erred in

applying § 280E to THC would violate their Fifth Amendment privilege. In Feinberg I,

this court rejected the Taxpayer’s motion for a writ enjoining the tax court from

compelling the production of documents because we concluded the Fifth Amendment

claims could be addressed on appeal after final 

. In predicting

some of the more difficult Fifth Amendment questions that might arise on appeal, we

explained:

                                              9
       [I]f the petitioners stand on their privilege we would face the difficulty of
       separating out a permissible adverse inference . . . from an impermissible
       sanction. . . . Similarly, if the petitioners choose to produce the discovery
       under compulsion we might have to confront the question whether any
       error by the tax court in ordering production was harmless and so beyond
       our power to remedy after final judgment.

But none of those concerns came to fruition. The Taxpayers did not produce

discovery under compulsion. Nor did the tax court impose a sanction for the Taxpayers’

failure to do so. Instead, the case went to trial without any additional discovery and with

the Taxpayers bearing the burden of proving the IRS erred in applying § 280E.

       Recent pronouncements from this court confirm that taxpayers normally bear the

burden of proving the IRS erred in determining a business was engaged in unlawful

trafficking. See Feinberg 

(“In tax court . . . it’s the petitioners who

carry the burden of showing the IRS erred in denying their deductions . . . .”); 

(“But in an action to recover taxes paid to the IRS, the taxpayer has the

burden to show not merely that the IRS’s assessment was erroneous, but also the amount

of the refund to which the taxpayer is entitled. Under this rule, the burden falls on [the

taxpayer] to show error, not on the IRS to prove trafficking.” (citation omitted) (internal

quotation marks omitted)). But those cases did not consider whether that placement of the

burden would violate the taxpayers’ Fifth Amendment rights, see 

(“Alpenglow has not raised a Fifth Amendment challenge on appeal . . . .”), an issue

we now consider in the first instance.

       In support of their argument that imposition of the burden violated their privilege

against self-incrimination, the Taxpayers cite a series of Supreme Court cases


                                              10
recognizing the Fifth Amendment “right not to be criminally liable for one’s previous

failure to obey a statute which required an incriminatory act.” Leary v. United States, 

, 28 (1969) (considering a petitioner’s claim that compliance with transfer tax

provisions would expose him to prosecution under state narcotics laws); see also Haynes

v. United States, 

, 95 (1968) (considering a petitioner’s claim that

“satisfaction of his obligation to register would have compelled him to provide

information incriminating to himself”); Grosso v. United States, 

, 66–67

(1968) (dealing with a statute where the petitioner “is obliged, on pain of criminal

prosecution, to provide information which would readily incriminate him, and which he

may reasonably expect would be provided to prosecuting authorities”); Marchetti v.

United States, 

, 42 (1968) (concluding statutory registration requirements

“may not be employed to punish criminally those persons who have defended a failure to

comply with their requirements with a proper assertion of the privilege against

self-incrimination”). The petitioners in those cases, however, were prosecuted for failing

to comply with a statute compelling them to provide self-incriminating information, and

the Court determined the Fifth Amendment privilege provided a complete defense to that

failure. See, e.g., 

(considering the petitioner’s contention that

“satisfaction of his obligation to register would have compelled him to provide

information incriminating himself”); 

(“[T]hose who properly

assert the constitutional privilege as to [the provisions requiring incriminatory conduct]

may not be criminally punished for failure to comply with their requirements.”). In other




                                             11
words, the Fifth Amendment privilege barred prosecution for failing to provide

self-incriminating information.

       The Taxpayers fail to explain how requiring them to bear the burden of proving

the IRS erred in applying § 280E to calculate their civil tax liability is a form of

compulsion equivalent to a statute that imposes criminal liability for failing to provide

information subjecting the party to liability under another criminal statute.1 Here, the

Taxpayers must choose between providing evidence that they are not engaged in the

trafficking of a controlled substance or forgoing the tax deductions available by the grace

of Congress. In the cases cited by the Taxpayers, the petitioners were faced with a choice

of whether to be prosecuted criminally because they did not provide the information, or




       1
         The Taxpayers devote a large portion of their reply brief discussing the
application of these cases to “substantiation” and COGS. In this appeal, the Taxpayers
did not challenge the tax court’s determination that the Taxpayers did not substantiate
higher COGS than those allowed by the IRS. Therefore, they waived any argument
relating to substantiation of COGS. See Alder v. Wal-Mart Stores, Inc., 

, 679
(10th Cir. 1998) (“Arguments inadequately briefed in the opening brief are
waived . . . .”). And neither substantiation nor COGS is relevant to the issue of whether
the Taxpayers’ Fifth Amendment privilege is violated by requiring them to prove the IRS
erred in rejecting THC’s business deductions under § 280E. First, § 280E does not have a
substantiation component. Second, the IRS did not use § 280E to deny any COGS in this
case. In fact, the IRS’s position is that § 280E does not apply to COGS because COGS is
an “exclusion,” not a “deduction.” Comm’r’s Br. at 7 (citing Alterman v. Comm’r, T.C.
Memo. 2018-83 at *30).
       In their first letter submitted under Federal Rule of Appellate Procedure 28(j), the
Taxpayers also point this court to Speiser v. Randall, 

(1958). But Speiser
involved a due process argument that the taxing framework restricted speech in violation
of the First Amendment, and it never mentions the Fifth Amendment privilege against
self-incrimination. 

–25.


                                              12
to be prosecuted criminally because they did. The circumstances are easily

distinguishable.

       Nor can we adopt the Taxpayers’ position without running afoul of Supreme Court

precedent “squarely reject[ing] the notion . . . that a possible failure of proof on an issue

where the defendant had the burden of proof is a form of ‘compulsion’ which requires

that the burden be shifted from the defendant’s shoulders to that of the government.”

United States v. Rylander, 

, 758 (1983). Such a concept “would convert the

[Fifth Amendment] privilege from the shield against compulsory self-incrimination

which it was intended to be into a sword whereby a claimant asserting the privilege

would be freed from adducing proof in support of a burden which would otherwise have

been his.” 

Amendment privilege “has never been thought to be in itself a

substitute for evidence that would assist in meeting a burden of production.” 

sure, “by invoking the privilege and refusing to produce the materials that

might support their deductions the [Taxpayers] no doubt made their task [of proving the

IRS erred in denying their deductions] that much harder.” Feinberg 

.

But “a party who asserts the privilege against self-incrimination must bear the

consequences of [the] lack of evidence.” United States v. Goodman, 527 F. App’x 697,

700 (10th Cir. 2013) (quotation marks omitted). Rylander teaches that the Taxpayers’

possible failure of proof on an issue on which they bear the burden is not “compulsion”

for purposes of the Fifth Amendment. Id.2 Therefore, we reject the Taxpayers’ contention


       2
         Although the Commissioner argued Rylander in its response brief, the Taxpayers
did not address the case in its reply. Instead, after this court expressed interest in

                                              13
that bearing the burden of proving the IRS erred in rejecting THC’s business deduction

under § 280E violated the Taxpayers’ Fifth Amendment privilege.

   Taxpayers’ Evidence in Support of Meeting Burden

       Because we conclude the Taxpayers bear the burden of proving the IRS erred in

applying § 280E, we must determine whether the Taxpayers met that burden. The



Rylander at oral argument, the Taxpayers attempted to challenge the applicability of
Rylander through a second rule 28(j) letter. The Taxpayers argue “Rylander is not
dispositive because taxation of illegal activity is ‘fundamentally different’ than taxation
for revenue raising or regulatory purposes, with a fully different set of rules.” Taxpayers’
Jan. 31, 2019 28(j) Letter (quoting Dep’t of Revenue of Mont. v. Kurth Ranch, 

, 782 (1994)). The distinction Kurth Ranch drew between taxation of illegal activity
and taxation for revenue raising purposes was based on a double jeopardy clause analysis
and makes no mention of the privilege against 

–83. In
their rule 28(j) letter, the Taxpayers also make arguments for the first time in this appeal
about the government’s burden in forfeiture cases and the tax court’s ability to preempt
nontax state law regarding marijuana.
        None of these are proper uses of a rule 28(j) letter. The Taxpayers’ attempt to
interject issues of double jeopardy, forfeiture, and preemption is a “tactical shift [that]
comes far too late in the day.” Niemi v. Lasshofer, 

, 1262 (10th Cir. 2013).
“[W]e generally refuse to consider any . . . new issue introduced for the first time in a
reply brief, let alone in a Rule 28(j) letter.” 

28(j) letter’s purpose is “not to
interject a long available but previously unmentioned issue for decision.” 

allow a party to use a rule 28(j) letter for such purpose
       risks leaving opponents with no opportunity (at least if they abide by the
       rules of appellate procedure) for a proper response; it risks an improvident
       opinion from this court by tasking us with the job of issuing an opinion
       without the full benefits of the adversarial process; and it invites an
       unsavory degree of tactical sandbagging by litigants in future cases: why
       bother pursuing a potentially winning issue at the outset when you can wait
       to introduce it at the last second and leave your opponent without a chance
       to respond?

will not consider the Taxpayers’ arguments regarding double jeopardy,
forfeiture, or preemption. And, for the reasons discussed above, we conclude Rylander is
dispositive of the only question we are faced with in this appeal—whether placing the
burden of proof on the Taxpayers violates the Fifth Amendment privilege.


                                             14
Taxpayers do not point to any evidence they introduced to meet this burden. Instead, they

contend there is a complete absence of proof that the Taxpayers unlawfully trafficked a

controlled substance for purposes of § 280E. In support, the Taxpayers quote a portion of

the tax court’s opinion that noted “there is not enough evidence in the record to make a

finding of fact that THC sold medical marijuana,” App. at 3597, and claim it “is fatal to

the IRS’s assertion that Section 280E applies,” Taxpayers’ Br. at 14. We reject this

argument for two reasons.

       First, the Taxpayers take the tax court’s comment out of context. The tax court

was considering whether the Taxpayers could substantiate higher COGS than allowed by

the IRS by relying on a rule that allows it to “estimate the amount of a deductible expense

if a taxpayer establishes that an expense is deductible but is unable to substantiate the

precise amount.” App. at 3596 (citing Cohan v. Comm’r, 

(2d Cir. 1930)).

The Taxpayers wanted the tax court to make this estimate of COGS “based on industry

standards for the medical marijuana industry.” 

Recognizing that “THC held

licenses for selling medical marijuana in Colorado” during the relevant tax years, the tax

court decided to “proceed as if THC was in the business of selling medical marijuana,”

even though “there is not enough evidence in the record to make a finding of fact that

THC sold medical marijuana.” 

In other words, the tax court refused to

allow the Taxpayers to rely on industry standards for the marijuana industry while

simultaneously refusing to meet their burden of establishing that they had indeed incurred

COGS in that industry. The tax court did not find the Taxpayers were not unlawfully




                                             15
trafficking a controlled substance; it simply chided the Taxpayers for failing to meet their

evidentiary burden.

       Second, as with COGS, “the burden falls on [the taxpayer] to show error [as to the

application of § 280E], not on the IRS to prove trafficking.” 

. Therefore, the question is not whether the Commissioner introduced sufficient

evidence to support the IRS’s finding of unlawful trafficking, but whether the Taxpayer

introduced evidence to prove THC was not unlawfully trafficking a controlled substance.

Thus, an absence of proof on the issue weighs against the taxpayers, not in their favor.

       The Taxpayers have not pointed to any evidence showing the IRS erred in

determining they were engaged in unlawfully trafficking a controlled substance.

Therefore, the Taxpayers failed to meet their burden of proving the IRS’s determination

that the deductions should be disallowed under § 280E was erroneous, and we affirm the

tax court on this alternative ground.

                                  III.   CONCLUSION

       The tax court erred in determining the Taxpayers were not entitled to the business

expense deductions because they failed to substantiate the expenses at trial. But we affirm

on the alternative ground that the Taxpayers failed to meet their burden of proving the

IRS erroneously concluded THC was unlawfully trafficking in a controlled substance. As




                                            16
a result, § 280E precluded the deduction of the Taxpayers’ business expenses, and the tax

court properly rejected their challenge to the deficiency.3




       3
          The Taxpayers are understandably frustrated with the loss of their business
expense deductions under § 280E. Despite operating in accordance with state law
controlling the distribution of medical marijuana, the Taxpayers are subject to greater
federal tax liability than other legitimate state businesses. But state legalization of
marijuana cannot overcome federal law. See Hancock v. Train, 

, 178 (1976)
(“It is a seminal principle of our law ‘that the [United States C]onstitution and the laws
made in pursuance thereof are supreme; that they control the constitution and laws of the
respective States, and cannot be controlled by them.’” (quoting McCulloch v. Maryland,

, 426 (1819))). Thus, the Taxpayers’ remedy must come from Congressional
change to § 280E or 21 U.S.C. § 812(c)(Schedule I) rather than from the courts.


                                             17