Seminole Tribes against the tax imposers
18 January 2005
It seems that Seminole Tribal Councilor Max Osceola is not a bit worried by the preliminary IRS ruling issued last month, according to which $396 million in municipal bonds should have been taxed. He is confident that in spite of the ruling new casinos and hotels on his territory will not become taxable. As Indians, Osceola has said, his people are used to claims made by federal government that turn out to be falseat the end. According to him if the ruling is enacted, other partners in the deal will have to pay.
The IRS seems to be disturbed by the fact that tribes cannot issue municipal bonds themselves, so they have to be issued indirectly and tribe's assumption that the transactions were proper was based on the advice of CTA and their bond lawyers. Nevertheless, IRS does not set free tribes from their responsibility for tax payment. In response CTA Executive Director, Ed Gray has fired back saying that the transaction was legal and the ruling will be contested by his office.
If the decision of tax payment is supported, CTA and the tribe could sue its partners for the bad advice they were given, or CTA could take it upon itself to pay shielding the bondholders. Either way, turmoil of lawsuits is expected to cascade upon the tribes, provided that the IRS decision is fostered.
Source: Online Casinos News Staff
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