FAQs for Indian Tribal Governments regarding Indian Gaming Regulatory Act (IGRA) Trusts for Minors


These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Indian law and Federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.

What does the term "minor or legal incompetent" mean within the context of an IGRA trust?

A minor is defined as an individual who is under the age of 18.

A legal incompetent is an individual who has been declared to be under a legal disability, other than being a minor, by a court of competent jurisdiction, including tribal justice systems or as established by the tribe.

When will a tribe be considered a "grantor and owner" of an IGRA trust?

A tribe will be treated as a grantor and owner of a trust under IRC sections 671-678 for any period the IGRA trust meets the requirements of Revenue Procedure 2011-56PDF

What is the economic benefit doctrine?

Under the economic benefit doctrine, a taxpayer using the cash receipts and disbursements method of accounting must include in gross income currently any financial or economic benefit derived from the absolute right to receive property in the future that has been irrevocably set aside for the taxpayer in a trust or fund.

Are per capita payments subject to income tax?

Yes.  Per capita payments from Indian casino profits are subject to income tax when distributed to tribal members. Tribes must notify members of their tax liability when payments are made (sections 11(b)(3) and (d)(1)(A) of IGRA, 25 U.S.C. sections 2710(b)(3) and (d)(1)(A)).

What is the effective date of Revenue Procedure 2003-14?

Revenue Procedure 2003-14PDF is effective for taxable years beginning after December 31, 2001. Revenue Procedure 2003-14 was superseded by Revenue Procedure 2011-56.