The Miccosukee Tribe in South Florida is suing the United States, claiming it should have received a larger share of $8 billion in Covid-19 relief funds distributed to 574 tribal governments. The irony is, for years, tribal members did not pay federal taxes on earnings from their lucrative casino, then lost a court battle to avoid paying its $1 billion IRS bill.
Documents filed July 31 in U.S. District Court in Miami show the tribe claimed it received the minimum $100,000 in pandemic relief funds after a formula used by the Treasury Department incorrectly determined its population was zero. Tribal officials claim it should have received $2 million since its actual population was 605, which federal officials were told about, documents state. They were assured revised data would be used to calculate the disbursement but that hasn’t happened. As a result, tribal attorney George Abney said, “the Miccosukee Tribe had no other option but to file a lawsuit in order to fix the problem.”
Abney added the tribe “is not aware of ‘retribution’ playing any role in the Treasury Department’s use of obviously incorrect population data.” Abney said 20 North American tribes’ population was listed as zero. In contrast, the Seminole Tribe of Florida was listed as having 1,749 members and was projected to receive between $5.9 million and $8.5 million, according to a Harvard University analysis.
The Miccosukee Indian Bingo and Gaming venue opened in 1990. Since then members have received increasing distributions of gaming revenue.
In 2014, the U.S. government sued a tribal member after learning she and her family did not pay taxes on $272,000 in revenue they received from tribal gaming operations in 2001. The tribe claimed the income was exempt from taxation because it qualified as tax-exempt Native American welfare benefits.
A U.S. District Court judge rejected that argument in 2016 and an appeals court affirmed the ruling in 2018. In 2019 the U.S. Supreme Court rejected the tribe’s request to take on the case. After that, the IRS began billing the tribe and its members a combined $1 billion in back taxes, late fees and penalties. An analyst determined the casino generates $72 million to $106 million annually and members earn between $120,000 and $160,000 a year.
Abney said although the Miccosukee Tribe claimed its members shouldn’t pay income taxes, it’s still entitled to the pandemic relief funds “because Congress specifically allocated a portion of such funds to Native American tribes. Taxation of Native American tribes is a complex issue. The Miccosukee Tribe pays significant federal taxes and is in compliance with its tax obligations.”
He noted, “The tribe and its members have amicably resolved their legitimate and good faith disagreements with the IRS. But they will continue to use available legal remedies to pursue relief from taxation when appropriate.”
