IRS Subcommittee on Indian Tribal Governments Releases Report

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IRS Subcommittee on Indian Tribal Governments Releases Report

July 2, 2018

ACT-ITG Report Released: Subcommittee Recommends IRS Treat Tribes Like States

In a report released June 7, 2018, the Indian Tribal Governments subcommittee (ITG) of the IRS Advisory Committee on Tax Exempt and Governmental Entities (ACT) made recommendations to treat tribal governments the same as state and local governments in regards to disclosure of taxpayer information under section 6103 of the Internal Revenue Code (IRC).

Issue:

IRC Section 6103 authorizes the IRS to share tax information by entering into agreements with governmental agencies for tax administration purposes. Currently, the IRS can only enter into intergovernmental agreements with states and municipalities. Tribes administer tax programs such as social security and Supplemental Nutrition Assistance Programs or SNAP; however, the failure to include tribes in section 6103 prevents the IRS from entering into agreements with tribes and from states and local governments from sharing federal taxpayer information with tribes.

Recommendations:

  • The ITG recommends that the IRS provide support for an amendment to IRC Section 7871 to treat indian tribal governments like states for purposes of IRC Section 6103. This would allow the IRS and tribal governments to enter into taxpayer information sharing agreements under IRC Section 6103(d)(1), which would be most beneficial to both parties in the effort to ensure compliance with the tax laws of both governments.
  • The ITG recommends that the IRS treat a tribal government entity administering identified social programs to determine eligibility and the correct amount of benefits under the program as a local agency, and provide information sharing as required by IRC Section 6103(l)(7). This IRS determination would not require an amendment of the IRC, but can be an administrative determination by the IRS.

The ITG provides important services to both Indian Country and to the IRS through research, identification of key issues unique to tribal governments, outreach and education assistance to tribal governments in understanding federal tax matters, and coordination with IRS divisions and oversight entities.

For questions or comments please contact Jennifer Parisien atJennifer@nafoa.org or (202) 558-8040.


Resources:

Full 2018 ACT-ITG Report

IRS ACT Homepage