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As good an argument for tax simplification as any

26 U.S.C. ยง 3306(c)(7) excepts from the definition of "employment"—and thus exempts from the payment of employment tax—"services performed in the employ of an Indian tribe, or any instrumentality" of a tribe. Thus, the Ninth Circuit holds in Blue Lake Rancheria v. United States, a 53-member tribe can create a corporation that "hires" existing workers at other companies, rent those employees back to their original employers, and split the tax savings. Everyone wins! Except taxpayers. [Martin via Wallace]

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.