In a legal showdown with the IRS, the Miccosukees say their members don't owe any taxes on income they receive from the tribe's gambling operation — a stance that sets them apart from possibly every Indian tribe with casinos in the United States.
Every year, the Miccosukees distribute millions in profits from the tribe's West Miami-Dade casino to their 650 members. They say that distribution constitutes a "tax" by a sovereign government, so, they argue, the IRS cannot tax the income, too.
The Miccosukees may be the only one of about 240 Indian tribes with American gambling facilities to deploy such a defense, which has failed in the past, according to legal experts and Indian regulatory authorities.
Tribe lawyers, in a new Miami federal court filing, accuse the Internal Revenue Service of "abuse of authority" in its ongoing investigation into the tribe's gambling distributions and former chairman Billy Cypress.
But the Miccosukees' counterattack seems to fly in the face of a key federal law regulating Indian gaming operations, the experts and authorities said.
The Indian Gaming Regulatory Act, passed by Congress in 1988, requires tribes with gambling facilities to report all member payments to federal authorities. It also requires tribes to notify the recipients that they may have to pay income taxes to the government.
The law specifically says such "payments are subject to federal taxation."
Unlike the Seminole Tribe, which operates the Hard Rock Hotel & Casino in Hollywood and Tampa, the Miccosukees have never filed a required "revenue allocation plan" with the Bureau of Indian Affairs to show how much gambling income from their bingo-style slot machines and poker games is distributed to members.
To read the complete article, visit www.miamiherald.com.