Income Reference
Income derived by Indians from exercise of treaty-
based fishing rights
No tax is imposed on income derived by a
member of an Indian tribe directly or through a
qualified Indian entity or by a qualified Indian
entity from a fishing rights-related activity of
the tribe. This applies to federal income and
self-employment taxes, and to employment
taxes, including Social Security, Medicare and
unemployment tax. IRC Section 7873
Income derived directly from allotted and
restricted Indian lands
Income derived from the land is exempt if:
(1) The land in question is held in trust by the
United States government;
(2) such land is restricted and allotted and is held
for an individual noncompetent Indian, and not for
a tribe;
(3) the income is “derived directly” from the land;
(4) the statute, treaty or other authority involved
evinces congressional intent that the allotment
be used as a means of protecting the Indian until
such time as he becomes competent; and
(5) the authority in question contains language
indicating clear congressional intent that the land,
until conveyed in fee simple to the allottee, is not
to be subject to taxation.
All five tests must be met, or the income is
taxable.
This includes income from certain rentals
(including crop rentals), royalties, proceeds of
sales of the natural resources of the land, and
income from the sale of crops grown on the land
and from the use of the land for grazing purposes.
Rev. Rul. 67-284, 1967-2 C.B. 55; Rev. Rul. 62-16,
1962-1 C.B. 7; Rev. Rul. 56-342, 1956-2 C.B. 20
Income from allotted lands under certain
programs administered by the Stabilization and
Conservation Service of the Department of
Agriculture or similar programs
The nature of the payment and the program under
which it was issued determine taxability. Note: If
you receive a Form 1099-G, Certain Government
Payments, list the amount on Schedule F with
a note that you are a member of a federally
recognized tribe and refer to Rev. Rul. 69-289,
and then back the amount out of income.
If you receive an IRS notice, but do not need to
file, respond with the same note.
Rev. Rul. 69-289, 1969-1 C.B. 34
Income directly derived from the sale of reindeer
or reindeer products by Alaskan natives
The Reindeer Industry Act of 1937 (P.L. 75-413
Chapter 897), P.L. No. 99-514, 100 Stat. 2085,
2873 (Oct. 22, 1986), Section 1709 and Hadley
v. U.S. 1993 U.S. Dist. LEXIS 13467 (D. Alaska,
1993)
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