American Indian Law Meets the Internal Revenue Code: Warbus v. Commissioner

North Dakota Law Review, Vol. 74, p. 691, 1998

Tax Notes, Vol. 83, p. 105, 1999

11 Pages Posted: 28 Feb 2009

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: February 27, 2009

Abstract

This article examines a 1998 Tax Court decision, Warbus v. Commissioner, that has implications for both American Indian law and federal tax law. Section 7873 of the Internal Revenue Code exempts from taxation amounts derived by American Indian tribal members from fishing-rights related activit[ies] of their tribes. Taxpayer Warbus claimed that discharge of indebtedness income from the foreclosure of his fishing boat qualified for the exclusion; the Tax Court said no. The author argues that Warbus was wrongly decided for two reasons: the court failed to take account of basic principles of American Indian law, and the court misapplied the controlling statutory language in section 7873. Warbus is the first case to explicate that section, and it could have unfortunate consequences for American Indian tribes. The author explains why that should not happen.

Keywords: Warbus v. Commissioner, IRC 7873, Indian Tribes, Taxation, American Indian Law

JEL Classification: K34, K41

Suggested Citation

Jensen, Erik M., American Indian Law Meets the Internal Revenue Code: Warbus v. Commissioner (February 27, 2009). Tax Notes, Vol. 83, p. 105, 1999; Tax Notes, Vol. 83, p. 105, 1999. Available at SSRN: https://ssrn.com/abstract=1350509

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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