Tribal settlement distributions were taxable income

Plain-English summary

Chief Counsel considered payments made to tribal members from a settlement of contract litigation between the federal government and certain tribes. Based on the facts provided and the applicable law, the advice found no legal basis to exclude the distributions from the recipients' gross income. It therefore treated the payments as taxable. The email stated that a later memorandum would provide a fuller legal analysis.

Ruling snapshot

• Question: Could tribal members exclude distributions from a government contract-dispute settlement from gross income?
• Outcome: advice given
• Key authorities: IRC § 61

Full text (IRS public release)

ID: CCA_2017013014491696
UILC: 61.32-01

Number: 201710026
Release Date: 3/10/2017
From:
Sent: Monday, January 30, 2017 2:49:16 PM
To:
Cc:
Bcc:
Subject: Tribal Settlement Distributions / 1099 Issuance issue

------------------------------

You asked whether certain payments to tribal members, made out of a settlement of litigation between the government and certain tribes related to a contract dispute, are taxable. Based on the information provided and a review of the applicable law, we do not believe there is any legal basis to exclude the payments from the tribal members’ income. We will follow up this email with a memorandum with a fuller discussion of the relevant law and analysis.

Let me know if you have any additional questions.

Thanks,
------

------------------------------
----------------------------------
-----------------------------
---------------
--------------------