Treasury spells out rules on tribe taxation

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WASHINGTON (AP) — Taxes cannot be levied on honoraria to a shaman or spiritual leader for religious services, but could be assessed on per-capita payments from gambling revenues to tribal members, under a proposal for taxing Native Americans by the Internal Revenue Service.

Native Americans and Alaska Natives have chafed at IRS audits on their finances and at demands for tax payments on benefits for and payments to them.

At a Senate Indian Affairs Committee hearing in June, tribes complained that the IRS was enforcing tax laws without taking into account unique aspects of their sovereign governments.

Amid the complaints, the IRS and Treasury Department met with tribal representatives to hammer out some proposed “guidance” on what is taxable and what is excluded.

Treasury said some examples of exclusions from taxation are housing payments to help individuals and families acquire modest homes or apartments, aid for disaster victims, medical or dental assistance and services of a shaman or medicine men or women for health and spiritual and cultural reasons.

Welfare programs funded by casino revenues are exempt, but per-capita payments from gambling revenue are taxable income.

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