Tribes back effort to stop IRS practice

An organization of 52 Indian tribal governments has now asked for a three-year moratorium on an Internal Revenue Service policy of taxing what are considered traditional tribal cultural practices.

After Quinault President Fawn Sharp last week issued a letter to U.S. Treasury Secretary Timothy Geithner calling for the moratorium, representatives of the Affiliated Tribes of Northwest Indian adopted a resolution endorsing the effort during the group’s convention in Oregon last week.

Tribal officials authorized Sharp, also the ATNI president, to issue a letter to President Barack Obama “firmly calling for his intervention to declare the moratorium and then taking steps to organize mutually agreed intergovernmental talks,” a news release said. The letter was sent to the White House Friday.

Sharp said the moratorium “will allow for the White House, Indian governments and a third party mediator to convene intergovernmental talks at the earliest possible date.”

The IRS, according to Sharp, began shifting its policies to tax gifts and money given to families engaged in cultural customs including funerals, naming parties, potlatches and other customs involving sharing of money and material goods as taxable forms of income.

The Internal Revenue Service’s interpretation of the General Welfare Exclusion rule has been used mainly in connection with state governments and had never been applied to Indian governments, Sharp has said.

Copies of the letter to Obama were sent to Sen. Maria Cantwell and Sen. Patty Murray in Washington state, plus Congressional delegations in Montana, Idaho, and Oregon, and to the leading members of the Congressional Joint Committee on Taxation in Washington, D.C.