Letter to General Membership - Tax Form 1099

Please note that the Tribal Council has issued a letter regarding Tax Form 1099. You may click here to read the letter.


The letter reads:

Dear Tribal Member:

The Tribal Council and Chief Financial Officer have been reviewing numerous inquiries about the Federal tax implications of the Form 1099 that was provided to you for taxable benefits that you revieved from the Tribe during 2013, such as emergency assistance, gift cards, and other direct benefits that the Internal Revenue Service (IRS) deems income to you. The Tribal Council is also aware of a fraudulent letter circulating among the Tribal Community suggesting that you should ignore the Form 1099. We are sending this letter to clarify these issues.

The amount of money listed on the Form 1099 that you received from the Tribe represents income to you, which is taxable. You are required by Federal law to include any money listed on a Form 1099 as income on your individual tax return, such as a Form 1040.

As required by Federal law, the Tribe has provided copies of the Form 1099 to the IRS. The IRS compares the information reported by employers, banks, businesses, and other payers on Form W-2, 1098, 1099, etc. with income and deductions you report on your income tax return. If you fail to report any income on your income tax return, the IRS will automatically generate a notice of underpayment.

The IRS may impose an accuracy-related penalty that is equal to 20 percent of your underpayment. For example, if the failure to include your Form 1099 income caused you to understate your tax liability by $500, you may be required to pay the additional amount of tax owed and your penalty would be $100 ($500 x .20 = $100). Please do not ignore the Form 1099.

The Form 1099 may not change your specific tax situation. Everyone's individual tax situation is different. Your Tribal Council and Chief Financial Officer cannot provide you with tax advice. If you have specific questions, we encourage you to contact a Federal tax advisor, Certified Professional Accountant (CPA), or tax attorney to assist you with your Federal tax return. We hope you find this letter helpful.

Sincerely yours,

Tribal Council