Tribal Tax Credits That Don’t Exist Trip Up the Wealthy and an IRS Nominee

Cut your tax bill in half. Or maybe, not owe federal tax at all. That was the pitch of a tribal tax credit scheme that bilked millions from investors, a Bloomberg Tax investigation revealed. The Treasury Department, however, said the credits aren’t real. Read the series below to learn how the arrangement was set up, how it influenced the confirmation of one-time IRS leader Billy Long, and how it has led to action in Congress and the courts.

Rich People Buy Tribal Tax Credits Treasury Says Don’t Exist
So-called sovereign tribal tax credits are marketed to wealthy investors as a way to escape looming or overdue tax bills. The problem, says the Treasury Department, is that they don’t exist. Instead they’re an example of how tax shelter promoters lean on confusion surrounding the US tax code.

Trump IRS Pick Has Ties to Group That Pushed Dubious Tax Credits
A consulting group that Trump’s one-time IRS head Billy Long worked with promoted tribal tax credits, Bloomberg Tax found. Filings later confirmed his ties to the dubious credits and receipt of campaign contributions from a group behind them.

Senate Democrats Seek Probe Into ‘Fake’ Credits Tied to IRS Pick
Democrats sought a criminal investigation into firms that have promoted nonexistent sovereign tribal tax credits. They also voiced concerns about Long, who was later confirmed.

Buyer of Dubious Tribal Credits Sues, Citing $1.7 Million Loss
A couple sued credit sponsor White River, claiming they paid for credits they were assured were legitimate, but the IRS rejected their tax return. They won a default judgment.

Dubious Credit Promotion Intensifies Campaign for Tribal Tax Law
Bipartisan House lawmakers revive legislation to clear up issues related to taxes and tribes.