All the coverage lately of the IRS seizure and sale of about 7,100 acres of Crow Creek Sioux tribal land stirred some memories of a story I wrote four years ago.
The story began with a phone call from Wallace "Wally" Wells, a former chairman of the tribe. He claimed that the IRS had seized some tribal funds to pay off part of a tax debt that the tribe owed. He said the debt was $3 million.
Furthermore, he said the debt was partially linked to a tax withholding scheme that tribal officials had been running for years. The tribe had been withholding federal taxes from employees’ paychecks, Wells said, but hadn’t been sending the money to the federal government. Numerous federal authorities declined to comment on Wells’ allegations.
That story hadn’t crossed my mind very much since I wrote it. It jumped back into my thoughts earlier this month, when The Associated Press reported on the land auction.
The AP said the auction was conducted to pay off a tribal tax debt of $3 million — the same number that Wells told me four years ago. Neither the AP coverage nor any of the subsequent coverage that I’ve seen has mentioned anything about a withholding scheme. Mostly, the stories have recited a claim by tribal officials that they mistakenly believed they did not have to pay employment taxes. The AP said the tribe claimed it was given that advice by "an official connected to the BIA."
I’ve tried in recent days to do some more checking on the validity of Wells’ claim about the withholding scheme, but nobody’s talking, and Wells died a year ago this month.