In Uncategorized on 03/27/2020 at 17:43

Loran Thompson & Sherry Delisle, Index No. 27015-17, filed 3/27/20, call themselves Indians, not Native Americans. So I shall “respect and use their terminology, “ as does Judge Buch; see Order, at p. 3, footnote 7.

Loran & Sherry claim the rental income they get from their apartments on the Akwesasne Reservation, and Loran’s from-home telecom business is “derived from Indian lands,” therefore is tax-exempt.

Loran & Sherry are registered members of the Saint Regis Mohawk Tribe (Mohawk Tribe), and lived on the tribe’s Akwesasne Reservation located in the State of New York. They have deeds from the Tribe for their land, but “(T)he Mohawk Tribe owns and holds title to the land on the Akwesasne Reservation. The land is not held in trust by the Federal government and allotted to individual tribal members. Individual tribal members, like Ms. Thompson and Ms. Delisle, may hold deeds issued from the tribe to occupy land on the Akwesasne Reservation; however, these individuals do not have the right to sell or convey this land.” Order, at p. 2.

To start with, the various treaties are no help to Loran & Sherry. (This being a non-political blog, I make no comment on how the Indians have fared under various treaties). Neither the Jay Treaty, the Canandaigua Treaty of 1794, nor the Treaty of Ghent gives any relief. For more, see my blogpost “Indians Not Taxed – But They Are,” 3/1/18.

To be in the land game, the land in question must be held in trust by the Federales and allocated to members of the Tribe. Here, the Tribe owns the land and deeded it to Loran & Sherry.

As for derivation, “…Mr. Thompson and Ms. Delisle did not directly derive their income from the land. We have previously held that rental income from apartments sitting on tribal land is not income directly derived from that land. Telecommunication services also do not exploit the land in a way that meets the ‘directly derived’ standard. Mr. Thompson and Ms. Delisle’s income is not exempt from Federal tax.” Order, at p. 4.

“Directly derived” from the land means mining, logging, farming, or ranching. In short, getting dirt from the land on your hands.

Loran & Sherry many not have dirt on their hands from alloted land, but IRS sure has Clay on theirs. “The Commissioner conceded the section 6662(a) accuracy-related penalties determined in the notice of deficiency because he could not meet his burden of production required under sections 7491(c) and 6751(b). Because the Commissioner cannot meet his burden of production, we find that Mr. Thompson and Ms. Delisle are not liable for the section 6662(a) penalties.” Order, at p. 5.

For Clay, see my blogpost “Indians Not Taxed – Not!” 4/24/19.

And thanks to Judge Buch for designating this order. I’d have had to plow through nearly 200 orders to find this without your generosity. Please Judges and STJs; there are more orders than ever just now, 99% of them clearing out cases for trial sessions that aren’t going to happen. Give us bloggers a break. If you’ve got a good order, let us know.


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