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IRS auditing Oglala Sioux Tribe in South Dakota

RAPID CITY (AP) -- The Internal Revenue Service is auditing the Oglala Sioux Tribe in South Dakota, a move that tribal officials fear could impact assistance given to impoverished members.

The IRS is requesting among other information documents detailing money given to tribal members and employees or paid on their behalf. Tribal governments do not have to pay federal income tax but individual tribal members do.

"I think it's going to hurt our tribe here, the assistance that we give our people," Tribal Treasurer Mason Big Crow told the media. "The IRS is going to try to tax the poorest of the poor, basically."

IRS spokeswoman Carrie Resch said the agency cannot comment on individual audits.

In a Dec. 13 letter to Tribal President John Yellow Bird Steele, the IRS asked the tribe to produce a two-page list of documents, including audit reports and financial statements prepared during 2009 and 2010; a list of tribal bank and credit card accounts; and a list of money given to tribal members and employees.

A challenge in compiling audit documents by the Feb. 3 deadline was coming up with the requested list of "Payments made on behalf of tribal members ... (including) health care, educational, legal advice/representation, utilities, housing, recreational," Big Crow said.

Only 38 percent of people in Shannon County, which comprises a large part of the Pine Ridge Reservation, are employed, according to 2010 Census data. The tribe last year gave out $900,000 in assistance to thousands of people on the Pine Ridge Reservation, Big Crow said. Typically, the treasurer's office awards only up to $200 at a time, though Big Crow said the Tribal Council gave one woman more than $600 at once last year to pay a year's worth of delinquent electricity bills. The department keeps receipts for bills it pays but does not give receipts to individuals for that money.

The tribe should issue a 1099 tax form whenever it gives someone more than $600, and individuals should report that income, said Marshal Tinant, a certified public accountant in St. Francis.