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]
As good an argument for tax simplification as any
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Rafael Mangual Project Manager, Legal Policy rmangual@manhattan-institute.org |
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Communications Manhattan Institute communications@manhattan-institute.org |