Source: https://supreme.justia.com/cases/federal/us/283/691/
Timestamp: 2019-04-23 14:26:14+00:00

Document:
1. The income received from the United States by an Indian, a member of the Osage Tribe, as his share of the royalties from oil and gas leases made by the tribe and approved by the Secretary of the Interior, under the Act of June 28, 1906, is subject to federal income tax under the Revenue Act of 1918.
So held where the Indian had received a certificate of competency; where his allotted lands, except the homestead, were taxable and alienable, and where the income (derived from leases of lands which had been purchased for the tribe with tribal funds and subsequently allotted, reserving the oil and gas to the tribe) belonged to him without restriction. Pp. 283 U. S. 693-694.
2. Such income is not a gift, nor is it immune from the federal tax as an instrumentality of government. P. 283 U. S. 696.
Certiorari, 281 U.S. 714, to review a judgment affirming a decision of the Board of Tax Appeals, 14 B.T.A. 1254, which sustained a determination of deficiency in income taxes.
The petitioner is a member of the Osage Tribe of Indians, duly enrolled as such under the Act of June 28, 1906, [Footnote 1] and holds a certificate of competency issued March 5, 1910, pursuant to that Act. He owns his own original allotment of the tribal lands, and has inherited from a deceased member a one-half interest in the latter's allotment, but nothing in this case turns on his ownership of these lands. He also owns his own original share in the tribal revenues, and, by inheritance from a deceased member, one-half of the interest in those revenues to which that member would be entitled if living.
years, [Footnote 2] now extended to April 8, 1958. [Footnote 3] Provision was made for the leasing of such minerals by the tribal council, with the approval of the Secretary of the Interior, [Footnote 4] and the income from such leases is to be placed in the Treasury of the United States to the credit of the members of the tribe and distributed among them quarterly. [Footnote 5] This was the source of the petitioner's income.
The petitioner urges several arguments in support of the claim that he is not liable for tax under the Revenue Act of 1918. These may conveniently be grouped into two main contentions: first, that the statute evidences no intent to tax petitioner on such income, and second that, if its language is broad enough to cover his case, his status or the nature of the income, requires a holding that the is exempt.
includes income "from any source whatever." The intent of Congress was to levy the tax with respect to all residents of the United States and upon all sorts of income. The Act does not expressly exempt the sort of income here involved, nor a person having petitioner's status respecting such income, and we are not referred to any other statute which does.
the lands of such member (except his or her homestead) shall become subject to taxation, and such member (with exceptions not here material) shall have the right to manage, control, and dispose of his or her lands the same as any citizen of the United States. [Footnote 12]"
Since 1910, when he received his certificate, petitioner has therefore been taxable upon his allotted lands, except his homestead, and they have been freely alienable.
asserts, that, as to his homestead, he still remains a restricted Indian. But this fact is only significant as evidencing the contrast between his qualified power of disposition of that property and his untrammeled ownership of the income in controversy. The latter was clearly beyond the control of the United States. The duty to pay it into petitioner's hands, and his power to use it after it was so paid, were absolute. Work v. Mosier, 261 U. S. 352; Work v. Lynn, 266 U. S. 161. The claim that, with respect to this income, the petitioner was restricted, and therefore exempt from the tax laid by §§ 210 and 211(a), must fail.
v. Oil Corp., supra) on the ground that, while in the possession of the United States, they re a federal instrumentality, to be used to carry out a governmental purpose. It does not follow, however, that they cannot be subjected to a federal tax. The intent to exclude must be definitely expressed where, as here, the general language of the Act laying the tax is broad enough to include the subject matter. Heiner v. Colonial Trust Co., 275 U. S. 232; Shaw v. Oil Corp., supra. But whatever may have been the liability of the fund to federal taxation while it remained in the hands of the government, it cannot properly be said that the share of it paid as royalties to the petitioner constituted in his hands an instrumentality of the government, and was therefore beyond the scope of the tax. Compare McCurdy v. United States, supra. There is therefore nothing in the nature of the income which excepts it from the effect of § 213(a) of the Revenue Act of 1918.
C. 3572, 34 Stat. 539.
§ 3, Act of 1906, supra.
§ 4, First and Second, and § 6, Act of 1906, supra.
See United States v. Nice, 241 U. S. 591, 241 U. S. 598; United States v. Waller, 243 U. S. 452, 243 U. S. 459; McCurdy v. United States, 246 U. S. 263, 246 U. S. 269; Shaw v. Oil Corp. 276 U. S. 575, 276 U. S. 579.
Section 4 of the Act of February 27, 1925, c. 359, 43 Stat. 1008 authorizes the revocation of a certificate held by one of more than one-half indian blood if the Secretary of the Interior shall find that the holder is squandering or misusing his or her funds. The revocation is not to affect the legality of any transactions theretofore made by reason of the issuance of a certificate, and all debts existing at the time of revocation are to be paid by the Secretary or his representative out of the income of the member. This section has no bearing upon the present case.

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