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Indian Tribal Land Auctioned by IRS for Tax Debt

December 7, 2009

The IRS has sold off a 7,100-acre parcel of land on Native American tribal land to pay off over $3 million in delinquent employment taxes, even though the federal government had earlier said the tribe did not owe taxes on the ranch land.

The Crow Creek Sioux tribe has filed a lawsuit in South Dakota in an effort to block the sale of the land, according to the Associated Press. A federal judge, Roberto Lange, turned down their request to block the sale, and it has been auctioned off for $2.6 million, $2 million less than its appraisal value. But the judge has scheduled a trial to listen to the tribe’s arguments.

The tribe has been on the land since at least an 1868 treaty. The land was held by the federal government in trust for the tribe. But the reservation was later broken up, privatized under the Dawes Act, and sold to non-Native Americans. The tribe eventually bought back the land in 1998 through a corporation, Crow Creek Tribal Farms Inc., but it was no longer under federal trust and apparently no longer tax exempt.

The tribe was planning to use the land to build wind farms and generate some much needed revenue, but the auction has thrown those plans to the wind. The tribe may be able to repurchase the land during a 180-day redemption period, however, and a trial is scheduled for late March. The tribe has little money of its own to pay for the land now, though, and lives in one of the poorest sections of the country. The federal government is still holding money in trust for the tribe that could be used to pay for the land, if the government allowed the money to be used.

This seems to be a case where the government should be making every effort to allow the tribe to continue to use its ancestral land, especially when it could be used for the wind energy that President Obama has campaigned to promote, not to mention his promises to help Native Americans overcome poverty. Buffalo County, S.D., has a 20 percent unemployment rate and the wind farm could not only help stimulate the economy there, but also provide jobs in a part of the country that sorely lacks them.

Comments (2)

All IRS actions have causes and effects (consequences). Oft times, a bit of thought provides for a better solution to a problem.

In this case an under evaluation of the land, low auction price, plays favorite with IRS acquittance, however unintended. And the Native American, at least so far, for the land is infinitely better than no plan. An the profits there from could be used to pay of the IRS debt and help cure the unemployment rate.

This may be an opinion, but so are most IRS decisions in handling back taxes due. Sometime businesses are shut, other time they are given time to pay. And unfortunately, oft times, these decisions are based on opinions and/or influence.
Posted by | Tuesday, December 08 2009 at 1:07PM ET
Just an observation. I thought this was newsletter for reporting accounting and tax news. However, the last paragraph of this Indian land article is clearly editorial opinion. Are the other articles written in this newsletter with a "slant" also?
Posted by NDDAD | Tuesday, December 08 2009 at 10:19AM ET
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