The Supreme Court on October 12 declined to review cases that involved the tax treatment of a federally recognized tribe’s casino revenue, a tax evader’s restitution order, and a couple’s disallowed business expense deductions.
James Clay and Audrey Osceola, members of the Miccosukee Tribe of Indians of Florida, petitioned the Supreme Court for review of an Eleventh Circuit decision that casino revenue distributions they received from the tribe were taxable income. The couple had failed to report the distributions as income and challenged the IRS’s determination that they were liable for deficiencies and penalties. The Tax Court confirmed that the distributions were taxable.
On appeal, the Eleventh Circuit affirmed the Tax Court, finding that the distributions aren’t exempt from taxation under a statute that exempted an earlier land transfer or lease payments for use of the tribe’s land. In their petition, the couple argued that the Department of Interior’s Bureau of Indian Affairs has exclusive authority over how the tribe compensates members for use of tribal land. Clay v. Commissioner, Sup. Ct. Dkt. No. 21-237, (2021), 990 F.3d 1296 (11th Cir. 2021).
The Court also denied Gary Christensen’s petition for review of a Ninth Circuit decision that affirmed a garnishment order to collect restitution related to his conviction as a tax evader. In his petition, Christensen argued that the district court didn’t have jurisdiction to order restitution because the IRS wasn’t a victim and it hadn’t made a final tax loss determination. Christensen v. United States, Sup. Ct. Dkt. No. 21-338 (2021), No. 20-10355 (9th Cir. 2021).
The Court also denied a petition from Anthony and Kathleen Provitola for review of an Eleventh Circuit decision that affirmed the Tax Court regarding their liability for deficiencies and penalties. After a bench trial, the Tax Court upheld the IRS’s disallowance of the couple’s claimed business expense deductions for a company that the court found was still in the start-up phase. In their petition to the Supreme Court, the Provitolas claimed that the Tax Court erroneously denied their motions for summary judgment in which they proved they were entitled to the deductions. The Eleventh Circuit decision will stand. Provitola v. Commissioner, Sup. Ct. Dkt. No. 21-409 (2021), No. 20-12615 (11th Cir. 2021).