Cobell Lawsuit & Settlement | Law | Trust

IRS hosts phone forum on tax issues and recent settlements





The Internal Revenue Service will be hosting a phone forum on June 26 to discuss tax issues affecting recent settlements in Indian Country.

The agenda for the forum lists three main topics: payments from the Cobell trust fund settlement, payments from tribal trust fund settlements and payments from the Keepseagle settlement.

Cobell payments are exempt from taxation under the law that authorized the settlement. The law also states that payments will not affect eligibility requirements for government benefit programs.

Per capita payments from tribal trust fund settlements are not taxable, for the most part. However, if a tribe invests the '"entire" settlement and makes a distribution at a later date, any earnings must be reported as income, according to IRS notice Per Capita Payments from Proceeds of Settlements of Indian Tribal Trust Cases.

Per capita payments from tribal trust fund settlements won't affect Social Security or Medicare benefits either, the Social Security Administration has determined.

In general, payments from the Keepseagle settlement are taxable, according to a FAQ on the settlement website.

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IRS affirms per capita payouts from trust settlements not taxable (9/6)
Social Security Administration issues ruling on trust payouts (08/23)