In Uncategorized on 11/28/2016 at 16:36

The Miccosukee Tribe is back, only the gravamen of their contest this time is Title A income, not Title B FICA-FUTA. For the latter, see my blogpost “Coulda Woulda Shoulda ,” 5/5/14.

So now the Miccosukees want to subpoena  Chairman of the National Indian Gaming Commission Jonodev O. Chaudhuri, Assistant Secretary of Indian Affairs Kevin Washburn and Acting Assistant Secretary of the Interior Lawrence Roberts to discourse anent  section 139E (the Tribal General Welfare Exclusion Act of 2014, Pub. L. No. 113-168, 128 Stat. 1883).

I was as innocent as you about the terms of this enactment until I read James Clay & Audrey Osceola, et al., Docket No. 13104-11, filed 11/28/16. So Judge Pugh will enlighten us, although I wish she had enlightened me by designating this order. The modesty shown by some of the Tax Court Judges is truly outstanding, but hiding one’s light under a cliché makes life tough for a blogger worn out with eggnog (and other liquids therein).

To begin with, IRS wants partial summary J to dispose of. “…the central issue in the case: whether certain distributions from the Miccosukee Tribe of Florida to petitioners are taxable. Respondent argues that we need not determine whether the distributions are of gaming revenue to conclude that they are taxable under section 61. Petitioners argue that the distributions are not taxable citing a number of statutes, including the exclusion from gross income provided under section 139E….” Order, at p. 2.

But there are too many loose factual ends. What is the source of funds – gambling or the land? And the Miccosukees’ arguments, though not in their amended petition, don’t ambush IRS; they knew the Miccosukees had that arrow in their quiver.

“Even were we to determine that the primary source of the distributions is gaming revenue and that the exclusion under section 139E does not apply, we nonetheless would require a trial to determine other sources of funding which might cause some portion of the distributions to be nontaxable. In addition, petitioners claim that part of the disputed deficiency relates to distributions attributable to other family members, not petitioners. Lastly, even were we to grant respondent’s motion, a trial would be necessary to determine whether penalties should be imposed. For these reasons we hold that summary judgment is not appropriate at this time.” Order, at p. 3. (Footnotes omitted, but read them; Judge Pugh didn’t rule on any argument, 11th Cir. hasn’t yet decided what it all means, and although USDCCDFL held for IRS, that doesn’t bind Tax Court).

Taishoff comment – Many times summary J for IRS still requires a trial for the chops, and that need alone shouldn’t preclude summary J, Judge.

As for the high-powered government witnesses, the fact that they took no enforcement action against the Miccosukees proves nothing. And Chevron deference only applies to regulations, of which none are present here.

The Miccosukees can make their legal arguments, and Judge Pugh will decide without the need for assistance from the Miccosukes’ cloud of witnesses.

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