IRS Sells Land of Indian Tribe for Back Taxes
Think you have it bad with taxes? The IRS just sold off the land of the Crow Creek Sioux Tribe in South Dakota to pay off back taxes the agency claims the tribe owes.
It has long been known that the various native Indian tribes in the United States were given raw deals when hostilities ended in the 1800’s. This case, however, is just bizarre. The Crow Creek Sioux were given their reservation as part of a treaty in 1868. The land was held in trust for the tribe by the Bureau of Indian Affairs, which meant it was protected from lawsuits and seizure. Eventually, title to the land was given to individual members of the tribe. Over time, these members sold their plots off to individuals that were not members of the tribe. This removed any protections.
The tribe eventually re-purchased the land. Title, however, was not transferred back to the Bureau of Indian Affairs to hold in trust. The IRS later issued a lien against the tribe for over three million dollars for unpaid employment taxes, interest and penalties. The tribe responded that the Bureau of Indian Affairs had told it that tribes did not have to pay the tax. Regardless, the IRS went ahead and sold the land at auction and recovered $2.6 million of the $3 million owed.
As usual, the IRS has not commented on the lawsuit. The actions it has taken, however, are rather odd. The IRS has never before seized Indian land on a levy. There is also an indication that no negotiations with the tribe or Bureau of Indian Affairs took place. Further, the tribe was apparently arranging a loan to pay the back taxes, but obviously cannot now since the land cannot be used for collateral.
The Crow Creek Sioux have filed a lawsuit against the IRS in federal court. The tribe asserts the IRS violated numerous treaties in seizing the land and was required to first get approval by Congress before acting. The nature of the dispute is such that the court can overturn the sale of the land, but the case is so convoluted that the outcome is unclear at this time.