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.