Latest Case This Week: Clay v. Commissioner of Internal Revenue (11th Cir.)

Some Observations on Calls for Senate Reform: Part One of a Two-Part Series

VIKRAM DAVID AMAR

In this first of a series of columns, Illinois Law dean and professor Vikram David Amar offers four observations about recent calls for reform of the filibuster device in the U.S. Senate. Dean Amar suggests looking at state experiences with supermajority rules, as well as the Senate’s own recent past, and he considers why senators might be reluctant to eliminate the filibuster. He concludes with a comment on President Joe Biden’s suggestion that the Senate return to the “talking filibuster” and praises a suggestion by Senator Tom Harkin (D-IA) that the cloture requirement (currently at 60 votes) could be lowered gradually, the longer a measure under consideration is debated.

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Clay v. Commissioner of Internal Revenue

Court: US Court of Appeals for the Eleventh Circuit

Docket: 19-14441

Opinion Date: March 16, 2021

Judge: Grant

Areas of Law: Gaming Law, Native American Law, Tax Law

After taxpayers filed suit challenging the IRS's deficiency findings and penalties, the tax court sustained the deficiency determinations but rejected the accuracy-related penalties. In this case, the Miccosukee Tribe shared profits from its casino with Tribe members and encouraged its members to hide their payments from the IRS. The taxpayers here followed the Tribe's advice, and they are now subject to hundreds of thousands of dollars in tax deficiencies. The Eleventh Circuit affirmed the tax court's judgment and rejected taxpayers' assertion that any taxes are barred by the Miccosukee Settlement Act that exempted an earlier land transfer from taxation. Even if the court interpreted the Act as providing an indefinite tax exemption for the "lands" conveyed under it or the agreement, the casino revenues still do not fit the bill because the casino's land was not conveyed under either the Act or the agreement. Furthermore, an exemption for "lands" only exempts income "derived directly" from those lands, and this court has already held that casino revenues do "not derive directly from the land." The court also rejected taxpayers' assertion that the payments are merely nontaxable lease payments from the casino, citing factual and legal problems. Rather, the court concluded that the payments are taxable income.