Opinion: Miccosukee Tribe loses decision over gaming per caps

"Individual members of a tribe, though, are American citizens as well as tribal members, and they can be taxed. That can lead to disputes. In a recent court battle, the IRS sought to subpoena banks as it was examining a Florida Indian tribe’s financial records. The IRS was conducting an investigation into gambling profits.

Predictably, the Miccosukee Tribe claimed protection under sovereign immunity. Nevertheless, the 11th U.S. Circuit Court of Appeals ruled for the IRS saying the agency can subpoena bank records. See US court panel upholds ruling against Fla. tribe. The IRS is investigating whether federal tax withholding and reporting requirements were met for gambling profits distributed to 600 members of the tribe from 2006 to 2009.

Again, the tribe is tax exempt. Yet the tribe must deduct and withhold income taxes from gambling revenues paid to tribal members. According to the case, the tribe failed to comply with its tax obligations from 2000 to 2005. That triggered an IRS investigation into tribal finances from 2006 to 2009."

Get the Story:
Robert W. Wood: IRS Wins Fight With Native American Tribe (Forbes 10/19)

11th Circuit Decision:
Miccosukee Tribe v. US (October 15, 2012)

Related Stories:
Miccosukee Tribe loses decision in casino per capita tax case (10/16)