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.

IRS issues its annual "Dirty Dozen" list of Tax Scams. The Internal Revenue Service’s “dirty dozen” list of tax scams, including schemes involving phishing, hiding income offshore and false claims for refunds is provided.

Notice 2006-65
Notice 2006-65 was 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, including an Indian Tribal Government is a party.

DOJ News Release
A former tribal council member was convicted for theft from an Indian gaming establishment involving unauthorized disbursements in the form of gift certificates which he didn’t pay for and deposits to a reloadable debit card.