MIAMI, Aug. 2 (UPI) -- The Miccosukees Indian tribe in Florida says casino revenues distributed to tribal members are not subject to federal tax, court papers show.
The tribe says it taxes the casino, then distributes the taxes collected to about 650 tribal members. As such, the tribe argues, since it is already a tax, it cannot be taxed a second time as income tax, The Miami Herald reported Monday.
But the IRS says the distributed funds from a business that is exempt from federal tax constitutes income that is subject to federal tax laws.
The tribe has not filed a "revenue allocation plan" with the Bureau of Indian Affairs to detail the finances for its West Miami-Dade casino and is in a legal battle with the IRS on what to disclose about the casino's earnings and how much is allocated to members.
One source said the tribe handed each of its members about $48,000 during a quarterly distribution of funds last August.
Legal experts said the tribe's arguments have lost in court in the past.
The tribe's argument is similar to having a non-profit business argue its workers are not subject to income tax, the newspaper said.
While tribal businesses are not subject to federal tax, employees of tribal businesses are. "There's no such thing as a non-taxable gift,"said attorney Dennis Whittlesey.
