Treasury spells out rules on taxing of tribes

AP News
Posted: Dec 14, 2012 2:32 AM

WASHINGTON (AP) — The Internal Revenue Service is proposing guidelines on what income and benefits of Alaska Natives and Native Americans are subject to taxation.

The IRS has proposed the new guidance that, among other things, prohibits levies on honoraria to a shaman, but allows assessments on per-capita payments from gambling revenues to tribal members.

The IRS wrote the guidance after tribes chafed at IRS audits and demand for tax payments on income and benefits provided to tribe members. Complaints were aired in a Senate hearing in June.

The friction threatened to cause a rift in what generally have been good relations between Native Americans and Alaska Natives and the Obama administration.

The proposed taxing guidance isn't final and can be commented on by tribes through next June.