Friday, June 1, 2007
The First Circuit yesterday, in Metallic v. Commissioner, No. 06-2387 (1st Cir. 5/31/07), affirmed the Tax Court (T.C. Memo. 2006-123) in holding that a Native American was subject to the income tax because a 1776 treaty did not exempt his tribe from tax.
The Tax Court had held:
Native Americans are subject to the same Federal income tax laws as are other U.S. citizens, unless there is an exemption explicitly created by treaty or statute. ... Any exemption must be based on the clear and unambiguous language of a statute or treaty. ... Petitioner has not shown that the Watertown Treaty specifically exempts any of his compensation.
On appeal, the petitioner objected to "the Tax Court's suggestion that he is a United States citizen, alleging that he is a member of a Canadian Micmac tribe." The First Circuit concluded:
Even if the facts are as he says, no prejudicial error by the Tax Court has been shown. Metallic acknowledges that he resides in this country, and so the tax laws apply to him even if he is not a citizen. See, e.g., Reg. § 1.1-1(a)(1) (noting that the tax code imposes a tax on the income of "every individual who is a citizen or resident of the United States").