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Litigation
Miccosukee Tribe loses bid to block release of gaming records


The Miccosukee Tribe of Florida can't claim sovereign immunity to the "superior" United States, a federal judge ruled on Tuesday.

The tribe sued when the Internal Revenue Service sought records as part of an investigation into a former chairman. The case expanded as the IRS tried to determine whether gaming revenues that were distributed to individual tribal members were properly reported.

Judge Alan S. Gold ruled that the IRS can seek documents from third parties as part of its investigation. Summonses were issued to Morgan Stanley, Citibank, Wachovia and American Express.

"As in the prior case, the United States seeks records from third-party recordkeepers, and any sovereign immunity the tribe can claim must necessarily defer to the superior sovereign power," Gold wrote in the 46-page ruling.

As part of the case, an IRS agent testified that the tribe likely hasn't reported payments to its members from 2000 through 2009. According to news reports, each of the tribe's 650 members receives about $61,000 a year in gaming revenues.

The Indian Gaming Regulatory Act says tribes can share gaming revenues with their members. But the Miccosukee Tribe reportedly hasn't submitted a revenue allocation plan to the Bureau of Indian Affairs.

IGRA also states that "per capita payments are subject to federal taxation" and states that "tribes [must] notify members of such tax liability when payments are made."

In his decision, Gold observed: "Notably, the tribe claims it is not responsible for withholding or reporting the funds which the IRS seeks to tax as income to individual tribal members."

Get the Story:
Federal judge: Miccosukees must turn over financial records to IRS (The Miami Herald 8/3)

District Court Decision:
Miccosukee Tribe v. US (August 2, 2011)

Related Stories:
Miccosukee Tribe disputes IRS over taxes on per capita payments (8/2)
Miccosukee Tribe under scrutiny for $61K per capita payments (6/29)