By: Julian Fortuna, Esq., Tina Garcia, Esq., Brant Kuehn, Esq., Sabrina Strand, Esq., and L. Alexis Whitley, Esq.
A recent Senate Finance Committee letter to the SEC Chairman underscores escalating federal scrutiny of so‑called “Tribal Tax Credits” (also referred to as “Native American Income Tax Credits”, “Sovereign Nation Tax Credits”, or “Tribal Nations Tax Credits”) marketed by White River Energy Corp. and certain promoters, with material implications for investors and advisors.
The letter states that White River has failed to file a Form 10‑K for fiscal years 2023 and 2024 and has not filed a quarterly report in nearly two years, with its last SEC filing in October 2024. OTC Markets flags White River as delinquent in SEC reporting. The Committee urges the SEC to consider Section 12(j) proceedings, including potential revocation of securities registration, if reporting noncompliance continues.
Highlights from Wyden’s Letter:
- Scope of the Scheme and Investor Losses: Wyden’s letter reveals that the “tribal tax credits” scheme is much larger than previously disclosed, with sales potentially exceeding $100 million, based on its review of the December 19, 2024 “Investor Call.”
- IRS Rejection of Credits: The IRS confirmed these credits are fraudulent and will not be honored, warning of penalties for taxpayers and promoters. Wyden emphasized that the scheme is illegitimate, with promoters using Native American identities without consent.
The letter details a federal criminal tax investigation into the “tribal tax credits” product:
Committee investigators confirmed that DOJ and IRS‑CI are conducting an ongoing criminal tax investigation into the sale of “tribal tax credits” involving White River and others, and that DOJ has issued subpoenas within the last eight months. The IRS advised the Committee that “these tax credits do not exist,” warning taxpayers and promoters of potential penalties. The IRS later updated its Internal Revenue Manual to identify a “Tribal Tax Credits” scheme and direct auditors that such credits are not allowed.
It’s very significant that the criminal investigation has been elevated from the IRS to DOJ. The criminal investigation division of the IRS requests DOL to get involved if, after multiple levels of review, the IRS determines that sufficient evidence likely exists to warrant a criminal prosecution.
Disclosures in White River’s own SEC filings, described in the letter, amplify the concerns:
White River reported entering a joint venture in November 2023 and claimed receipt of $5.5 billion of “United States federal income tax credits issued to a Native American tribe.” White River also disclosed at least $24 million in proceeds from sales of these credits and referenced a JV partner that sold it $500 million of such credits.
The Committee notes that a DOJ criminal investigation into White River’s “tribal tax credits” is a material fact that must be disclosed to investors, particularly in light of the IRS’s confirmation that such credits “do not exist.”
What this means for you:
If you purchased “Tribal Tax Credits,” you will incur, or perhaps have already incurred, significant tax, penalty, and interest costs as the IRS has instructed its tax return examination personnel to fully disallow these credits, irrespective of documentation. The penalties and interest costs are in addition to the loss of the amount you paid for the worthless credits.
Greenspoon Marder LLP is one of only two law firms in the nation to file lawsuits against multiple defendants who inappropriately sold and/or advised taxpayers to purchase and claim Tribal Tax Credits on their tax returns. Our team has been instrumental in identifying this deceptive tax scheme and pursuing claims for damages on behalf of duped investors.
If you or someone you know purchased Tribal Tax Credits, contact our Tribal Tax Group today to discuss your situation and evaluate protective steps before it’s too late.
