• February 12, 2016
  • admin
  • 0

A longstanding tax dispute between the Miccosukee Indian tribes in Florida and the Internal Revenue Service (IRS) has snowballed into a major controversy. The dispute is over whether or not gaming profits should be subject to federal tax withholding. In this post, we discuss the regulatory framework about gaming on Native American lands.

The Indian Gaming Regulatory Act of 1988 (IGRA)

Until 1988, there were no federal laws to regulate the gaming structure on Indian owned land. That’s when the US government came up with The Indian Gaming Regulatory Act that established a legal framework to govern Indian gaming. The Act was formed to:

  • Prevent gaming as a means of generating revenue for the Native American tribes
  • Provide a legislative basis for the operation/regulation of Indian gaming
  • Encourage economic development of the Native American tribes
  • Protect the enterprises from negative influences (such as organized crime)

This law requires Native American tribes to submit a ‘Revenue Allocation Plan’ to the Bureau of Indian Affairs specifying how various funds or gains are to be spent on developmental works such as housing, education, and health care. This act has brewed up some extensive controversy over the years, and the Miccosukee Indians have long been reluctant to comply.

Tax Exemptions

Native American Tribes

The US Supreme Court, in the case of California v. Cabazon Band of Mission Indians, exempted the tribes that conduct gaming on Native American, from taxes. In 2011, for instance, 236 Native American tribes operated 422 gaming facilities across 28 states and earned $26.5 billion. They, however, were not subject to federal taxes.

Native American Individuals

Tax exemption does not apply to individual Native Americans because they are considered US citizens, and need to pay federal income taxes. Despite the fact that the tribes are exempted from paying taxes out of gaming profits, the same when distributed among individual members of the tribe are subject to taxation. This is where the controversy intensifies as the Miccosukee Tribe distributes between $120,000 and $160,000 of their gambling profits among its 600 members every year. The distribution of profits is no longer flying under the radar of the IRS.

Conclusion

There has been a lack of clarity regarding enforcement of tax regulations on gaming profits of Native Americans. It has led to controversy and murky legal battles with no concrete solutions in sight. In such a scenario, having transparency in the legal system and regular communication between both parties can help resolve this issue. Stayed tuned to find out the rest of the story.

Please follow and like us:

What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
M WM W
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
js_loader
Quick Inquiry

    captcha

    Enter the text you see above