Fredric Arlan Dubray - Page 4

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               On January 10, 2002, respondent mailed to petitioner a                 
          notice of deficiency for the years at issue.  Petitioner timely             
          filed a petition in this Court seeking a redetermination.                   
               Petitioner argues that his wage income earned as an employee           
          of the corporation is not subject to Federal income tax as a                
          result of certain provisions of the treaty.  Specifically,                  
          petitioner relies upon a phrase in article 2 of the treaty which            
          modifies the description of the treaty lands as “set apart for              
          the absolute and undisturbed use and occupation of the Indians              
          herein named”.4  It is uncertain whether this provision was                 
          intended to exempt the Cheyenne River Sioux Tribe itself from               
          Federal taxation of its income related to the buffalo restoration           
          project, but petitioner’s position is weakened by a more basic              
          point.  The caselaw has well established that income earned by an           
          individual member of a tribe from working for the tribe or for a            
          corporation on unallotted tribal land is not exempt even if the             
          income derived by the tribe from the land would be exempt in the            
          hands of the tribe itself.  See, e.g., Holt v. Commissioner, 364            
          F.2d 38, 41 (8th Cir. 1966) (involving a lease of unallotted                
          land), affg. 44 T.C. 686 (1965).  The position of this Court in             

               4Petitioner must show in this regard that the income in                
          question is specifically entitled to an exemption from taxation             
          by treaty or Act of Congress.  Squire v. Capoeman, 351 U.S. 1, 6            
          (1956); LaFontaine v. Commissioner, 533 F.2d 382, 382 (8th Cir.             
          1976), affg. T.C. Memo. 1975-165.                                           

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