Internal Revenue Service Actions on Tribal Tax Credits

Over the past three years, several individuals and their companies, known as “promoters,” have lured taxpayers into buying Native American Tax Credits (“NATCs”) with the promise of significant reductions in tax liability for purchasers. Promoters pitched these NATCs as valuable tax credits that could offset taxable income and claimed the credits were authorized by the Indian Self-Determination and Education Assistance Act (“the Act”). See 25 U.S.C. § 5301 et seq. The Act refers to specific grants that may be given to tribal governments out of funds appropriated by the U.S. Treasury Department but does not itself create NATCs or provide support for the use of NATCs. Critically, the Internal Revenue Service (“IRS”) has recently updated its Internal Revenue Manual (“IRM”) to provide IRS perso