The U.S. Tax Court today issued an opinion concluding that an Indian tribe was not liable for the employment tax liabilities of its corporate division.
The case is: Blue Lake Rancheria Economic Development Corp. v. Commissioner, 152 T.C. No. 5 (March 6, 2019). Read the Tax Court’s opinion [PDF 193 KB]
The Tax Court briefly summarized the facts in this case as follows:
The Tax Court held that the charter properly allowed the Indian tribe to create corporate divisions whose assets and liabilities were distinct from those of the tribe for federal tax purposes. The court also found that the corporate division in this case acted as a legally distinct division of the tribe; and therefore, the IRS was precluded from collecting the employment tax liabilities of the corporate division from the tribe. The Tax Court concluded that the corporate division was liable for the employment taxes.
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