- 3 - These deposits were to be made over a period of 10 years. The primary purpose of the reserve account was to provide funds to meet the major capital needs of the project. During 1992 and 1993, petitioners deposited $3,873 and $3,760, respectively, into the reserve account. During those years, no funds were disbursed from the reserve account for expenses. On petitioners' 1992 and 1993 Federal income tax returns, petitioners deducted the amounts deposited into the reserve account during those years. In the statutory notice of deficiency, respondent denied petitioners' claimed deductions for these payments. Respondent also denied petitioners' claim for refund for all taxes paid relating to their 1992 and 1993 income. OPINION I. Taxability of Petitioners' Income Petitioners argue that (1) Native American Indians are not taxable under the Constitution and its amendments, and, in the alternative, (2) the Cherokee Treaty of 1866 (the 1866 Treaty), 14 Stat. 799, exempts their income from taxation. A. Constitutional Arguments There is well-established case law holding that Native American Indians are taxable unless specifically exempted by a Federal statute or treaty. See Squire v. Capoeman, 351 U.S. 1, 6 (1956); Dillon v. United States, 792 F.2d 849 (9th Cir. 1986),Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011