Justia U.S. 11th Circuit Court of Appeals Opinion SummariesArticles Posted in Gaming Law
Clay v. Commissioner of Internal Revenue
After taxpayers filed suit challenging the IRS's deficiency findings and penalties, the tax court sustained the deficiency determinations but rejected the accuracy-related penalties. In this case, the Miccosukee Tribe shared profits from its casino with Tribe members and encouraged its members to hide their payments from the IRS. The taxpayers here followed the Tribe's advice, and they are now subject to hundreds of thousands of dollars in tax deficiencies.The Eleventh Circuit affirmed the tax court's judgment and rejected taxpayers' assertion that any taxes are barred by the Miccosukee Settlement Act that exempted an earlier land transfer from taxation. Even if the court interpreted the Act as providing an indefinite tax exemption for the "lands" conveyed under it or the agreement, the casino revenues still do not fit the bill because the casino's land was not conveyed under either the Act or the agreement. Furthermore, an exemption for "lands" only exempts income "derived directly" from those lands, and this court has already held that casino revenues do "not derive directly from the land." The court also rejected taxpayers' assertion that the payments are merely nontaxable lease payments from the casino, citing factual and legal problems. Rather, the court concluded that the payments are taxable income. View "Clay v. Commissioner of Internal Revenue" on Justia Law
United States v. Jim
The Miccosukee Indian Tribe and one of its members raised an affirmative defense that revenue distributions from gaming activities were exempt from taxation as Indian general welfare benefits under the Tribal General Welfare Exclusion Act (GWEA), 26 U.S.C. 139E. The Eleventh Circuit held that the distribution payments could not qualify as Indian general welfare benefits under GWEA because Congress specifically subjected such distributions to federal taxation in the Indian Gaming Revenue Act (IGRA), 25 U.S.C. 2701 et seq.; the member waived any arguments as to penalties or the amount assessed against her, and the tribe lacked a legal interest in those issues; and the district court did not err in entering judgment against the tribe because the tribe intervened as of right and the Government sought to establish its obligation to withhold taxes on the distributions. View "United States v. Jim" on Justia Law
Alabama v. PCI Gaming Auth.
Alabama filed suit against PCI under state and federal law to enjoin gaming at casinos owned by the Poarch Band of Creek Indians and located on Indian lands within the state’s borders. The district court rejected Alabama's claims of public nuisance and dismissed the action based on defendant's tribal immunity or failure to state a claim for relief. The court affirmed, concluding that PCI was entitled to tribal sovereign immunity on all claims; the Individual defendants were entitled to tribal sovereign immunity as to Alabama’s state law claim but not its claim under the Indian Gaming Regulatory Act (IGRA), 18 U.S.C. 1166-68; and Alabama failed to state a claim for relief under the IGRA because 18 U.S.C. 1166 gives states no right of action to sue. View "Alabama v. PCI Gaming Auth." on Justia Law