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About Smoke signals. (Grand Ronde, Or.) 19??-current | View Entire Issue (March 15, 2001)
SMAjAlS 7 MARCH 15, 2001 Ymi Msum Comnieifclh): Important Tax Information for Tribal Members The Timber payments, casino distributions are treated differently by the IRS. By Chris Mercier Hello Grand Ronders! I am the Taxman, and I represent the Confederated Tribes of Grand Ronde. You may not know me, but I sure know you. You see, I can read minds, and know firsthand the confu sion generated in recent times over per capita money and how that fits into our country's tax scheme. Well lets put that all to rest right here and now. D What is the difference between the distribution of casino rev enues and timber revenues? Glad you asked. Those checks you have received in December, that's casino revenue, meaning pre-tax money generated by Spirit Mountain Casino. A couple weeks before Christmas, you got a check; well that was it casino revenue distribution. Timber revenues are a bit differ ent. For starters, once or twice a year you may notice a light green enve lope that finds its way into your mail box. Inside is often a sheet of paper reading Member Benefits Trust Fund, and below that some dollar amounts. That is timber money, or money generated from the sale of timber off our Reservation or trust land (land held in trust for us by the government). As an adult Tribal member you have the option of with drawing that money or letting it sit in the fund and collect earnings. II Okay I understand that part now, but how do I pay taxes on the money? Well, this is not going to be easy to explain, so I recommend you get a pencil and paper. CASINO REVENUE: The casino money is part of your taxable income. TIMBER REVENUE: It is not taxable, but the earnings are. You know about the stock market, right? Well, the money is invested in the stock market. If the stock market does well, the money in the fund collects earnings. Those earnings are taxable and will be explained in the next ques tion. Other factors, like your age, will determine how you pay those taxes. D Age? How? Well once again, I'll have to explain them separately. CASINO REVENUE: To begin, you don't receive this money directly until you are 18 years old. From the age of 0 to 13 years, this money is held in what is called Mi nors Trust, and in that time collects earnings from investments. During that period, taxes are deferred until distributed. From age 14 to 17, the money in this time frame goes into another trust. The yearly casino revenue dis- Prepare a tax return form. If you owe, you have two options: the first option is to pay out of your income (therefore not reducing the amount of your child's trust account). The second option is to request payment from your child's trust account (this request will reduce the amount of money in your child's trust account). The withdrawal can be made only under the following circumstances: The Tribal member must submit by mail a written request to the Finance Officer for withdrawal to pay income taxes. The individual Tribal member must prepare an individual tax return and submit by mail a copy to the Tribe's Finance Officer. The Tribe's Finance department will issue checks payable to the IRS and other state revenue I if y0u have any further questions offices if applicable, and mail them to the Tribal member. It is the responsibility of each Tribal regarding taxes, please contact member to mail the checks to the taxing authorities. the Tribe's Small Business: If the Tribal member has other income, the withdrawal will be limited to the tax liability Roland Metzger 503-879-2477 associated with the gaming and trust revenue. Larry Black ...503-879-4582 Note: Please expect time for the Finance department to process your documents. If you are Elaine Moore 503-879-2478 getting close to the deadline you must file an extension the Tribe cannot do this for you. Barbara Lake 503-879-2476 Toll-free ..1-800-422-0232 tributions and the earnings on past year's revenues are taxable. You will know this because every year the Tribe will send you at least two forms, called 1099s, to report it. . From age 18, you get the annual casino revenue and it is part of your taxable income along with the earn ing from the money you still have in trust. But, and read this twice, the money that has accumulated in trust prior to age 18 will remain there un til you turn 21, at which point you are eligible to withdraw it. This is not a flexible rule. If your 18th birth day is even a day after the distribu tion date, then you'll not see that money until age 21. TIMBER REVENUE: This money sits in the Member Benefits Trust Fund until you are 21. From age 0 to 13, the total earn ings must exceed $700 before they are taxable. From the time you are no longer a dependent of your parents (gener ally 19-24 years old), any earnings, even $1, is considered taxable. 0 Now here's a confusing ques tion. My buddy has a son who is a Tribal member, as do I. How ever, he pays taxes on his son's trust earnings, and I don't. What's going on here? Simple, really. You could be in trouble. As we've established by now, earnings are taxable. How much you will have to pay varies with each individual. But you must report it and then determine how much tax, if any, is due. The IRS will find out if your wrong, and then you'll be stuck with back taxes and a fine as well. I'd recommend you attend to this matter ASAP. B Oh! I had no idea. Well of course you wouldn't, this kind of information doesn't come naturally. I'm not done with this subject though, children are yet an other matter. Parents have two options reallv: pay taxes on their child's earnings when necessary (the easy way) or go the other route (the hard way). D And what's the hard way? Are you going to tell me? Oh yeah, but I wanted to make sure you were listening, since this is very important. If for some reason you are unable to pay the taxes on your child's trust fund earnings, then prepare the tax forms and contact the Finance Department or Member Ben efits. They can dip into your child's funds and cut a check payable to the IRS to cover the taxes. DO NOT pay the taxes and then request reim bursement from the Tribe, because that will not be done under any cir cumstances. REMEMBER, this is a timely process. Be sure to allow your self enough time, maybe a month or two. DO NOT show up at Finance Department at 4:55 p.m. on April 14 and expect any help, because by then it will be too late and the blame would rest squarely on your shoulders. D Can't I... Wait! Sorry to interrupt, but there remains one last child issue. Earlier I told you about the $700 exception of unearned income that children (dependents) qualify for. Bear in mind that the exception doesn't per tain specifically to the trust fund earnings, but to all sources of un earned income. Example: if Junior wins $500 in a raffle or something of that nature. You need to keep a tight record of windfalls like that. O Can't I just lie about my earn ings to the IRS? Strangely enough, this may be the most important question you could ask me. Some people just choose to ignore all the forms the Tribe sends them regarding money in either fund. Big mistake, because we at the Tribe tell the IRS about all the eco nomic activity going on. We have to, because it's the law. Don't cop out on them, or you'll be in serious trouble. If you still have trouble do ing your taxes, then get somebody to help. Just remember when the Tribe sends you a tax form, they are not really asking for information, but saying they already know, and are just helping you organize your taxes. The Tribe gives Tribal members the money, and the responsibility to handle it. B What's this I hear about Indi ans living on Indian land and get ting tax breaks? This is not my specialty, but we'll clear it up for you. After all, plenty of rumors about this have been go ing around, many of them wrong. In Oregon, if you are: 1. A member of a federally recog nized Tribe; and 2. Live on Tribal Trust Land (In dian Land, e.g., Grand Meadows, Elders Housing); and 3. Are employed by a Tribe or Trib-ally-owned business that is based on Trust Land; You will receive a subtraction on your Oregon State income taxes. How much differs from person to per son, but either way it's less than the average Joe. Keep in mind you are not exempt from taxes, i.e., you still have to file as normal, but just pay less, and that includes casino rev enue. Meet these three require ments, then the benefit is yours, pro vided you are located in the geo graphic boundaries of the State of Oregon. For example, if you are a Grand Ronde Tribal member living and working in Warm Springs for Warm Springs, then you qualify. If you are a Grand Ronde member liv ing and working on the Yakama Res ervation, no luck. In Oregon! I can not stress that enough. By the way you must file for this subtraction on your own. Just con tact the Oregon Department of Rev enue (the state version of the IRS) to inform them. The Tribe will not do it for you. fl This is confusing and I'm still thinking there's got to be more, right? Absolutely. We've discussed how the Tribe will send you mail that updates trust fund earnings, and some forms that will help you file taxes. Periodically well get someone who shows up here at the Tribal Gov ernance Center asking questions about why they haven't gotten any paperwork or money. And plenty of people pester the Member Benefits Department with similar questions. Keep the Tribe updated!!! Think of the Tribe in some ways as an employer. If they don't have your Social Security number, present ad dress, or notification of name changes via marriage or divorce, then you've a slim chance of getting any paper work, updates or even checks. Fur thermore, the Tribe pays a fine from the IRS every time they report a Tribal member and don't have such key in formation. Please, please, please, keep the Tribe updated.
