Seneca Dodges Taxes on Payouts
As reported by the Buffalo News: "The Seneca Nation of Indians is shielding its members from paying millions of dollars in federal income taxes on their personal share of tribal casino profits. "The nation claims no taxes are due because the money is tied to a tax-free lease settlement the tribe struck in Salamanca 12 years before it opened its first casino. "A newsletter to members of the tribe, along with land transaction records and Seneca filings with the Securities and Exchange Commission, spells out a complex scheme the Seneca Nation is using to avoid federal taxes on $75 million in casino bonuses individuals will receive this year and next. "The two congressmen who sponsored the 1990 Seneca Settlement Act for its Salamanca leases say the legislation was never intended to help the Senecas acquire land for casinos or avoid paying federal taxes on gambling profits. "And the Internal Revenue Service suggests the money paid to individual Senecas might very well be taxable.
"At issue are the $4,500 payments that will be sent to each of the tribe's 7,200 enrolled members this year and the $6,000 they will be paid next year.
".Federal law requires that taxes be paid on per capita payments to tribal members from their casinos, and IRS regulations require both tribes and their members to report this money as income.
"But Seneca leaders say the nation is exempt from those requirements because the millions of dollars they are paying tribal members do not come directly from gambling revenues."