Law360 Quotes Allison Binney and Jenny Magallanes on New Treasury Committee’s Efforts to Solve Tribal Tax Issues

Law360 has quoted Akin Gump partner Allison Binney and associate Jenny Magallanes, both members of the firm’s American Indian practice, in the article “Treasury Panel Spurs Hopes Of Solving Tribal Tax Problems.” The article reports that the Treasury Tribal Advisory Committee (TTAC) held its first meeting in June, with many now watching to see whether it will be able to tackle certain tax issues affecting American Indians.

According to the article, the duties of the TTAC, under a 2014 law, cover a host of tax issues, including determining which welfare benefits that a tribal government provides its members would be considered too “lavish and extravagant” to qualify for exemption from income tax.

Tribal benefits questions are especially tricky ones for tribes, as IRS field agents have been “acting in a very ad hoc way, and there was no continuity in how field agents were auditing some of these tribal benefits,” said Binney. In particular, TTAC will need to define what would make a benefit “lavish or extravagant,” and thus not eligible for exclusion from tax. In addition, there are questions as to what benefits qualify as financial support for cultural activities, such as tribal ceremonies, which IRS agents have called into question during audits.

Magallanes added that each of the definitions that need to have guidance set forth within the law “really differs for each tribal nation.” It will be important in future TTAC meetings, she pointed out, that the committee and the Treasury Department “truly do engage on a government-to-government basis with tribes so they feel like they're providing input.”

Binney admitted that TTAC “has a tough job and they probably need more resources.” As the committee pursues its goals, her hope, she said, is that “as more and more advocates and lawyers and tribal leaders out there hear about the activities of TTAC, more and more people will be engaged.”