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this regard was well explained in Jourdain v. Commissioner, 71
T.C. 980, 989 (1979), affd. per curiam 617 F.2d 507 (8th Cir.
1980), which states:
Petitioner’s salary did not represent his pro rata
share of tribal income. Rather, his wages were solely
for his benefit, obtained through his labor, and we do
not believe, therefore, that his wages were directly
derived from the land. Nonetheless, petitioner argues
that his management of tribal land is a necessary part
of deriving (tax exempt) income from the land, and that
to tax his income from management of the land is to
thereby indirectly tax the land itself. However, it
does not follow that income received by an employee as
compensation for services rendered the tribe is tax
exempt because the income earned by the tribe through
(in part) his services is tax exempt. * * *
In Jourdain, as support for this position, we cited Fry v. United
States, 557 F.2d 646 (9th Cir. 1977), and Walker v. Commissioner,
326 F.2d 261 (9th Cir. 1964), revg. in pertinent part 37 T.C. 962
(1962). In Walker, the Court of Appeals stated:
Walker earned the income as an employee of the Gila
River Pima-Maricopa Indian Community by performing the
duties of elected Treasurer as prescribed by the
Community charter and By-laws. If, under the law, the
income of an organization is exempt from taxation, it
does not follow that the income received by an employee
as compensation for service rendered to such
organization is also exempt from taxation. * * * [Id.
at 264.]
Given this precedent, petitioner’s wage income is not tax exempt.
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