By: Brant Kuehn, Esq., Tina Garcia, Esq., Sabrina Strand, Esq., and Andrew Domingoes, Esq.
As we previously discussed in our article, “Internal Revenue Service Actions on Tribal Tax Credits,” the IRS has continued to increase its scrutiny of purported tribal tax credit investment programs and the individuals and entities promoting them. The agency’s latest announcement, cautioned taxpayers, businesses, tribal communities, and tax professionals about promoters marketing so-called “Tribal Tax Credits,” “Native American Tax Credits,” and “Sovereign Tribal Tax Credits,” which the IRS states do not exist under federal law.
According to the IRS, promoters often claim these purported credits can be purchased at a discount and used to reduce federal tax liabilities or generate refunds. To support these claims, promoters may reference alleged government agreements, tribal sovereignty principles, transferable tax credit provisions, or other tax programs. The IRS has made clear that none of these authorities create a valid federal Tribal Tax Credit.
The agency also warned that taxpayers who claim nonexistent credits may face audits, tax assessments, penalties, interest, and potentially other enforcement actions. Importantly, the IRS noted that the acceptance of a tax return does not constitute approval of a credit claimed on that return, and taxpayers remain responsible for the positions taken on their filings.
For individuals and businesses involved in tribal tax credit investments, the IRS announcement highlights the importance of understanding both potential tax exposure and available legal remedies. Those who have received IRS notices, are facing examinations, or believe they were misled by promoters, advisors, brokers, or other parties should promptly evaluate their legal options.
Greenspoon Marder’s Tribal Tax Group is actively representing clients nationwide in matters involving tribal tax credit investments, including White River Tax Credits. The team is at the forefront of litigation and recovery efforts, helping clients evaluate potential legal claims, respond to IRS actions, pursue appeals, and explore avenues for recovery against advisors, brokers, promoters, and other responsible parties. More information about our group can be found here: https://www.gmlaw.com/tribal-tax-group/
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