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Fraud and Abusive Schemes Information for Indian Tribal Governments

The office of Indian Tribal Governments has identified various abuses and schemes that cause financial risk to the tribes and their tribal members. Examples of current abuses and schemes are listed below:

  • Improper sheltering of taxable gains by passing third party transactions through Indian tribes
  • Disguising of enterprises to appear as tribally-owned so as to evade Federal Unemployment Tax and oversight by state insurance regulators
  • Embezzlement from tribal enterprises
  • Use of Tribal credit cards for personal gain
  • Use of Casino comps for purposes unrelated to gaming play
  • Illegal activities (i.e. Bribes and Kickbacks) in enterprises where tribes lack adequate internal control
  • Employment Tax Irregularities
  • Improper tax treatment of the use of net gaming revenue, including misclassified distributions to tribal members
  • Misrepresentation of federal status of tribe to attempt to obtain tax advantages
  • Misrepresentation of treaty provisions to claim improper tax relief
  • Claiming nonresident alien status through the filing of false Forms W-8BEN
  • Schemes related to Income derived from the land

IRS Creates Link for Reporting Abusive Schemes
The office of Indian Tribal Governments has created an e-mail link to submit information on abusive schemes that surface within Indian country. Our intent is to take action where warranted that will protect the tribes and their members from financial risk.

Release - Phishing Scams, Hiding Income Offshore Top the 2009 "Dirty Dozen" Tax Scams.   The Internal Revenue Service today issued its 2009 “dirty dozen” list of tax scams, including schemes involving phishing, hiding income offshore and false claims for refunds.

News Release - IRS Warns to Watch for Questionable Employment Tax Practices
The IRS has issued an alert for various schemes where federal employment taxes are not being properly withheld or paid by employers. Tribes need to be alert for individuals promoting these schemes.

Notice 2006-65
Notice 2006-65 has been issued to provide information regarding new excise taxes and disclosure rules that target certain potentially abusive tax shelter transactions to which a tax-exempt entity is a party.

DOJ News Release
Seven former tribal officials have been indicted for various criminal charges, including misuse of casino revenues and tax evasion. IRS will continue to take actions that protect the tribes and their members from financial abuse.

Page Last Reviewed or Updated: 11-Apr-2017