ITG FAQ #4 Answer-Is there a general rule with regard to land questions?
Revenue Ruling 74-13, 1974-1 C.B. 14 says the IRS will follow the decision in Stevens v. Commissioner, 452 F.2d 741 (9th Cir. 1971). The Stevens case states that income derived directly from restricted land, purchased by the Secretary of the Interior, on behalf of individual Indians, and held in trust by the U.S. solely for their benefit, under statutes construed to provide tax exemption for Indian property, is exempt from federal income tax. The property is exempt from federal income tax regardless of the source of funds used to purchase the land. This modifies Revenue Ruling 62-16 and 67-284. ( see question #3)