Generally, an enrolled member of a federally recognized Indian tribe who resides on his or her tribe’s reservation in California is subject to California personal income tax, except with respect to income derived from sources within the tribe’s reservation. See McClanahan v. Arizona State Tax Commission, 411 U.S. 164 (1974).
In Legal Notice 2015-1, the California Franchise Tax Board set out its position on whether an enrolled member of a federally recognized Indian Tribe is living on or off the reservation for California personal income tax purposes. The FTB articulated four scenarios and stated that the FTB would apply the “closest connections” test articulated in Appeal of Stephen Bragg, 2003-SBE-003 and other Board of Equalization cases to determine whether a tribal member would be treated as residing on a tribal reservation.
Michel R. Stein is a Principal at Hochman Salkin Toscher Perez, specializing in both civil and criminal tax controversies at every administrative level of the Internal Revenue Service and the California Franchise Tax Board, as well as tax planning for individuals, businesses and corporations. For almost 30 years, he has represented individuals with sensitive issue civil tax examinations where substantial penalty issues may arise and extensively advised individuals on foreign and domestic voluntary disclosures regarding foreign account and asset compliance matters. Mr. Stein is a frequent lecturer at national and regional conferences on a wide range of tax-related topics including tax residency matters, cryptocurrency, sensitive tax compliance issues, international tax issues, and State and Federal worker classification issues. Additional information is available at http://www.taxlitigator.com
For more information, please contact Michel R. Stein at stein@taxlitigator.com
Robert S. Horwitz is a Principal at Hochman Salkin Toscher Perez P.C., former Chair of the Taxation Section, California Lawyers’ Association, a Fellow of the American College of Tax Counsel, a former Assistant United States Attorney and a former Trial Attorney, United States Department of Justice Tax Division. He represents clients throughout the United States and elsewhere involving federal and state administrative civil tax disputes and tax litigation as well as defending clients in criminal tax investigations and prosecutions. In 2022 the Tax Section of the California Lawyers Association awarded him the Joanne M. Garvey Award for lifetime achievement in and contributions to the field of tax law. Additional information is available at http://www.taxlitigator.com.
For more information, please contact Robert S. Horwitz at horwitz@taxlitigator.com
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