Federal Taxation

STATUTORY AND ADMINISTRATIVE RULINGS SPECIFICALLY ADDRESSING TAXATION OF AMERICAN INDIANS

• Internal Revenue Code

Section 45A - Indian Employment Credit

Section 168(j) - Accelerated Cost Recovery System - Property on Indian Reservations

Section 3402(r) - Extension of Withholding to Certain Taxable Payments of Indian Casino Profits

Section 4225 - Exemption of Articles Manufactured or Produced by Indians

Section 7701(a)(40) - Definitions - Indian Tribal Government

Section 7871 - Indian Tribal Governments Treated as States for Certain Purposes

Section 7873 - Federal Tax Treatment of Income Derived by Indians From Exercise of Fishing Rights Secured by Treaty, Etc.

• Treasury Regulations

Treas. Reg. Sec. 48.4225-1 - Exemption of articles manufactured or produced by Indians

Treas. Reg. Sec. 305-7701-1 - Definition of Indian tribal government (Temporary)

Treas. Reg. Sec. 305.7871-1 - Indian tribal governments treated as States for certain purposes

• Revenue Rulings

Rev. Rul. 56-110, 1956-1 CB 488 - Section 3306(c)(6) of the Federal UnemploymentTax Act - Definitions

Rev. Rul. 56-342, 1956-2 CB 20 - Section 61 - Gross Income Defined - Income derived directly from allotted and resricted Indian lands

Rev. Rul. 57-407, 1957-2 CB 45 - Section 61 - Gross Income Defined - Statutory provisions; gross income defined - Income derived from sale of allotted Indian land

Rev. Rul. 58-610, 1958-2 CB 815 - Section 4224 - State and Local Governmental Exemption

Rev. Rul. 59-354, 1959-2 CB 24 - Section 61 - Gross Income Defined -Compensation for services, including fees, commissions, and similar items

Rev. Rul. 62-16, 1962-1 CB 7 - Section 61 - Gross Income Defined - Gross Income - Proceeds from sale of livestock raised on allotted and resricted Indian land

Rev. Rul. 67-284, 1967-2 CB 55 – Section 61 – Gross Income Defined –Gross income – Principles applicable to the Federal income tax treatment of income paid to or on behalf of enrolled members of Indian tribes

Rev. Rul. 68-38, 1968-1 CB 446 – Section 3402 – Income Tax Collected at Source –Requirement of withholding

Rev. Rul. 68-231, 1968-1 CB 48 – Section 103 – Interest on Certain Governmental Obligations – Interest upon obligations of a State, Territory, etc.

Rev. Rul. 68-493, 1968-2 CB 426 - Section 3121 - Definitions - Indian employee not exempt from FICA, FUTA, and federal income tax withholding

Rev. Rul. 74-13, 1974-1 CB 14 - Section 61 - Gross Income Defined - Gross Income - Income from trusted Indian land

Rev. Rul. 74-179, 1974-1 CB 279 – Section 2055 – Transfers for Public, Charitable, and Religious Uses – Deduction for transfers for public, charitable, and religious uses; in general

Rev. Rul. 81-295, 1981-2 CB 15 – Section 61 – Gross Income Defined – Gross income – Indian tribal corporation

Rev. Rul. 85-194, 1985-2 CB 301 - Section 6041 - Information at Source - Returns, information; Indian tribes

Rev. Rul. 86-44, 1986-1 CB 376 - Section 7871 - Indian Tribal Governments Treated as States for Certain Purposes  

Rev. Rul. 94-16, 1994-1 CB 19 – Section 61 – Gross Income Defined – Federal income taxation of Indian tribes and corporations organized by Indian tribes

Rev. Rul. 94-65, 1994-2 CB 14 – Section 61 – Gross Income Defined – Federal income taxation of corporations organized by Indian tribes under section 3 of the Oklahoma Welfare Act

Rev. Rul. 94-81, 1994-2 CB 412 - Section 7871 - Indian Tribal Governments Treated as States for Certain Purposes - Application of excise taxes to Indian tribal governments

Rev. Rul. 2004-50, 2004-1 CB 977 - Section 1361 - Small Business Corporation

Rev. Rul. 2006-20, 2006-15 IRB 746 - Section 6662: Imposition of accuracy-related penalty on underpayments; Section 6663: Imposition of fraud penalty; Section 6664: Definitions and special rules

• Revenue Procedures

Rev. Proc. 84-37, 1984-1 CB  513 - Section 7871 – Indian Tribes Treated as States

Rev. Proc. 2002-64, 2002-2 CB 717 – Section 7871 – Indian Tribes Treated as States

Rev. Proc. 2003-14, 2003-1 CB 319 – Section 61 – Gross Income Defined

• Private Letter Rulings/Technical Advice Memorandum

PLR 8803013 (January 22, 1988) - Section 61 - Gross Income Defined - State chartered Indian tribal corporation will be exempt from Federal taxation

PLR 8937036 (June 20, 1989) - Section 61 - Gross Income - Derived from Business - Income of corporation wholly owned by Indian tribe is exempt from tax

PLR 9043066 (August 2, 1990) - Section 3121 - Social Security Definitions - Indian tribe liable for FICA taxes

PLR 9215009 (January 2, 1992) - Section 7871 - Indian tribes Treated as States - Member of Onondaga tribe is not tax-exempt

PLR 9345037 (August 13, 1993) - Section 3121 - Social Security Definitions - Bingo card maker is an employee

PLR 9747004 (November 21, 1997) - Section 7873 - Indian Fishing Rights - Settlement payments for fishing rights not taxable

PLR/TAM 199901001 (August 7, 1998) - Section 7805 - Authority to Prescribe Rules - Tribe entitled to retroactive relief from Federal income taxes

PLR/TAM 199906001 (October 22, 1998) – Section 3121 – Wages Defined – Payments to tribal council members not subject to FICA

PLR 200022048 (March 8, 2000) - Section 61 - Gross Income Defined; Section 675 - Trust Administrative Powers; Section 451 - Year of Inclusion - Indian tribal benefits taxes when paid

PLR 200029039 (April 20, 2000) - Section 7871 - Indian Tribes Treated as States

TAM 200031006 (April 3, 2000) – Section 61 – Gross Income Defined; Section 451 – Year of Inclusion – Indian tribal benefits to minors taxed when deposited in trust

PLR 200041023 (July 17, 2000) - Section 368 - Corporate Reorganizations - Merger of Indian corporation is taxable

PLR/TAM 200106007 (October 20, 2001) – Section 61 – Gross Income Defined; Section 451 – Year of Inclusion – Payments to trust not includable in income

PLR/TAM 200222003 (May 31, 2002) – Section 61 – Gross Income Defined; Section 451 – Year of Inclusion – Indian tribal benefits to minors taxed when distribution made

PLR 200648024 (August 4, 2006) - Section 7871 - Indian Tribes Treated as States; Tax-Exempt Interest

TAM 200704019 (October 24, 2006) - Section 7871 - Indian Tribes Treated as States

TAM 200705027 (October 24, 2006) - Section 7871 - Indian Tribes Treated as States; Section 103 -Tax-Exempt Interest

• Other IRS Pronouncements

GCM 38853 (May 17, 1982) – Section 61 – Gross Income Defined

Notice 89-34, 1989-1 CB 674 - Section 7873 - Income derived by Indians from exercise of fishing rights

IRS Technical Assistance (September 29, 1999) – Section 168 – ACRS – Qualified Indian reservation property must be used more than half the time on the reservation

Announcement 2001-16 (January 29, 2001) – Section 3306 – FUTA Definitions – Tribal FUTA obligations

Field Service Advice Memoranda (FSA) 200229008 (July 19, 2002) - Indian Tribal Governments: Legal Status and Discovery Questions

Chief Counsel Advice Memoranda (CCA) 200323024 (June 6, 2003) - Levy on Income from Indian Nation

IRS Manual - Exempt Organizations Technical Guidelines Handbook - Native American (Indian) Tribal Governments (February 23, 1999)

IRS Guide to Indian Taxation Issues (Draft release date: December 1, 1993)  NOTE: There have been subsequent changes in reporting rules and regulations since the release of this document.  Refer to IRS Publication 3908 for possible changes in reporting requirements.

IRS Publication 954 – Tax Incentives for Distressed Communities (excerpts) – Indian Employment Credit and Depreciation of Property Used on Indian Reservations (January 2004)

IRS Publication 3747 - Office of Indian Tribal Governments - Pamphlet describing office of Indian Tribal Governments at the IRS (May 2006)

IRS Publication 3908 - Gaming Tax Law and Bank Secrecy Act Issues for Indian Tribal Governments - publication on the Federal tax responsibilities associated with tribal gaming (August 2006)

IRS Publication 4268 - Indian Tribal Government Employment Tax Guide - Detailed publication covering the responsibilities of a tribal employer (October 2006)