Tribal Tax Credits Available at 40% Discount from Promoters

Promoters are offering significant discounts on Native American Tax Credits (NATCs) to taxpayers. These NATCs, backed by various financial promoters, are supposedly capable of reducing taxes by 40% through direct payments to the IRS from qualifying tribal entities. However, these promoters fail to provide a legal basis for the NATC program’s existence or its functioning.

The NATC program promoters issue taxpayers a sales contract with a registration number, instructing them to claim the tax credit on Form 1040, schedule 3, Part I, line 6z or other nonrefundable credit. Some promoters go as far as to suggest that clients can obtain a refund of unused credits.

Notably, promoters claim to be working with White River Energy Corp, which allegedly has five billion in NATCs for public sale, with future opportunities to sell an additional $59 billion in NATCs. The promoters’ supporting documents and legal authority contain vague statements about tribal self-governance rights or reference bills that never became law. White River discloses their legal opinion on the NATCs only to selected prospective buyers under a Non-Disclosure Agreement. A private letter ruling with the IRS is currently being pursued, but neither this nor the tax opinion has been provided to RSM US.

The Indian Self-Determination and Education Assistance Act mainly backs the NATC. However, this Act, referenced in 25 USC section 5322, makes no mention of tax or tax credits. Instead, it allows the transfer of grants to tribal governments for strengthening or improving themselves.

Promoters claim Native American Tribes can monetize federal income tax credits by having the Treasury grant tax credits to raise capital for tribe-benefiting programs. Still, there’s no direct legal foundation for this in the Act. Promoters also advertise a 40% discount on these investments, implying a higher risk profile than other federal income tax credits. No regulations detail the use or claiming procedures of these credits, and the US Treasury Department and IRS Office of Chief Counsel cannot confirm the program or NATCs’ existence.

No legal mechanisms behind NATCs have been provided by promoters for endorsement or verification of the program’s existence. We advise consultation with a tax advisor if approached regarding NATC investments to discuss tax risks and concerns.