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. With regard to Indian tribes, what is the significance of land held in trust? General principles applicable to the federal income tax treatment of income received by members of Indian tribes are described in Revenue Ruling 67-284, 1967-2 C.B.55PDF. Five tests must be met for such income to be excludable: the land in question must be held in trust by the United States Government; such land must be restricted and allotted and held for an individual non-competent Indian; the income must be derived directly from the land; the statute, treaty or other authority involved must evidence congressional intent that the allotment be used as a means of protecting the Indian until such time as he becomes competent; and the authority in question must contain language indicating clear congressional intent that the land, until conveyed in fee simple to the allottee, is not to be subject to taxation. Payments derived directly from the land include such items as: rentals (including crop rentals); royalties; proceeds from the sale of natural resources on the land and from the sale of cattle and other livestock raised on the land; and income from the sale of crops grown on the land or from the use of the land for grazing purposes (Revenue Ruling 56-342, 1956-2 C.B. 20PDF, as amplified by Revenue Ruling 62-16, 1962-1 C.B. 7PDF). Payments made to non-competent Indians under programs administered by the Department of Agriculture's Stabilization and Conservation Service are income "derived directly from the land" and are excludable from gross income (Revenue Ruling 69-289, 1969-1 C.B. 34PDF).