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statute or some rule of law that exempts the person or the item
from gross income. HCSC-Laundry v. United States, 450 U.S. 1, 5
(1981). Tax exemptions, including those affecting native
peoples, are not granted by implication. If Congress intends to
exempt certain income, it must do so expressly. Earl v.
Commissioner, 78 T.C. 1014, 1017 (1982); Lazore v. Commissioner,
T.C. Memo. 1992-404, affd. in part and revd. in part 11 F.3d 1180
(3d Cir. 1993).
It is well established that American Indians are subject to
Federal income taxation unless an exemption exists in the
language of a treaty or an Act of Congress. Squire v. Capoeman,
351 U.S. 1, 6 (1956); United States v. Willie, 941 F.2d 1384,
1400 (10th Cir. 1991); Cross v. Commissioner, 83 T.C. 561, 564
(1984), affd. sub nom. Dillon v. United States, 792 F.2d 849 (9th
Cir. 1986).
Petitioners do not point to any treaty provision which they
allege exempts their tribal lands from taxation and we are unable
to find such a provision. See Northern Pac. Ry. Co. v. Wismer,
246 U.S. 283 (1918) (describes an "agreement" between the Spokane
Tribe of Indians, the Department of the Interior, and the
Department of War). The only "Act of Congress" referred to by
petitioners is section 7873.
Under section 7873, income derived by a member of an Indian
tribe "directly or through a qualified Indian entity" from a
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