IRS Audits Oglala Sioux Tribe's Payments to Low-Income Tribal Members

IRS Audits Oglala Sioux Tribe's Payments to Low-Income Tribal Members

ICTMN Staff
2/13/12

The Oglala Sioux Tribe is being audited for the first time in the last 12 years, and tribal officials fear low-income members may have to pay money owed to the Internal Revenue Service (IRS), reported the Rapid City Journal.

The tribe's treasury office has not kept records of relief money the tribe has given to individuals, Oglala Sioux Tribe Treasurer Mason Big Crow said.

The IRS sent a December 13 letter to the Oglala Sioux Tribe President John Yellow Bird Steele, requesting a two-page list of documents, including audit reports and financial statements prepared during 2009 and 2010, a list of tribal bank and credit card accounts and a list of money given to tribal members and employees.

Frustrated by the request, Yellow Bird Steele acknowledges that he initially did not want to comply. Still, tribal officials compiled the audit documents by the February 3 deadline, despite the challenges of tracking down payments made on behalf of tribal members, including "health care, educational, legal advice/representation, utilities, housing, recreational."

"I think it's going to hurt our tribe here, the assistance that we give our people," Big Crow told the Rapid City Journal. "The IRS is going to try to tax the poorest of the poor, basically."

While tribal governments are not required to pay income tax, individual tribal members do. The tribe should issue a 1099 tax form whenever it gives someone more than $600, and individuals should report that income, said Marshal Tinant, a certified public accountant with Empire Accounting and Financial Services in St. Francis, South Dakota, to the Rapid City Journal.

To put the tribe's payments to individual tribal members into perspective: In 2011, the tribe provided $900,000 in assistance to thousands on the Pine Ridge Indian Reservation. The monetary support is typically awarded in $200 amounts, although the tribal council has given out $600 payments in particular cases, and some individuals ask for money multiple times, Big Crow said.

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