The Internal Revenue Service said the Miccosukee Indians of West Miami-Dade, Florida, owe 0 million for failing to report and withhold taxes from the tribe’s 2000-2005 distributions of gambling profits to tribal members, according to federal tax lien notices filed in Miami-Dade Circuit Court. Hundreds of individuals in the 600-member tribe also received separate IRS bills totaling million for failing to pay personal income taxes on those distributions.
Those numbers could dramatically rise as the IRS currently is auditing Miccosukee’s gambling distributions for 2006-2010, when payouts to each member reached $160,000 annually.
In response, Chairman Colley Billie said, “The Miccosukee people will continue to pay all applicable lawful taxes, as they always have, and we will continue our efforts to find a fair and workable solution to this dispute. The Miccosukee people, however, will not be intimidated or coerced by these tax liens into surrendering tribal sovereignty or principles for which so many of our ancestors have paid a very high price in blood, lives and tears.”
Under federal law, the tribe’s status as a sovereign nation means the entity itself is not subject to taxes. But once the tribe distributes casino profits to members, they are individually responsible for reporting and paying income taxes on their annual returns. And, the tribe itself must withhold taxes on the distribution income and forward those deductions to the IRS.