Another attack on tribal sovereignty Barely two months after an assault from the National Labor Relations Board, tribal sovereignty is again under attack, this time by the Internal Revenue Service. In a July 29 statement, the IRS announced its intention to "ensure the collection of the appropriate amount of tax on imported gasoline, diesel fuel and kerosene." The announcement made no mention of tribal governments, instead casting the matter as one of tax avoidance. Indian entrepreneurs from the St. Regis Mohawk Tribe and the Seneca Nation in Upstate New York importing fuel into the United States from Canada are among the Indian businessmen who may face difficulties crossing the border in the future. The regulation not only attempts to coerce Indian entrepreneurs to register with IRS, but also seeks to force non-Indian dealers to give up doing business with Indian importers. The temporary regulations issued on July 29 "provide that importers and unregistered dealers are jointly and severally liable for the tax on fuel imported for unregistered dealers," the IRS said. The agency said that current Customs regulations allow it "to collect any tax that is not paid by either the importer or the unregistered dealer by charging the importer's Customs bond." Importers can avoid tax liability "by doing business only with fuel dealers that are registered with the IRS." The agency added that importers may employ a specified certification procedure to verify whether a particular fuel dealer is registered. "As a sovereign tribal government, the St. Regis Mohawk Tribal Council was never consulted to participate in meaningful discussion with the IRS on the effect of the regulation," the council said in a July 30 press release. "The Tribal Council strongly opposes the implementation of the regulation and is currently pursuing legal remedies to protect tribal businesses that will be affected ... and to safeguard the needed fees they contribute to support essential community services and programs. "The implementation of the regulation is an infringement on our tribal sovereignty and undermines the tribe's ability to effectively govern [its] internal affairs," the release concluded. The tribal council, one of three governing bodies on the American portion of the Akwesasne reserve, is the sole federally recognized Mohawk government. In 2004, it collected some $1 million in "fuel fees" from reservation-based importers, which funded health, education, law enforcement and other tribal governmental services. The council maintains that forcing Mohawk entrepreneurs to pay federal excise taxes will force many to close, threatening both the tribal tax base and the tribe's ability to attract matching federal funds for many programs. The rhetoric of the IRS statement echoes similar language in the May 28 ruling by the National Labor Relations Board. In that instance, NLRB broke three decades of precedent and sought to assert jurisdiction on a "case-by-case basis" in labor disputes involving Indian-owned businesses located on reservation land. "When Americans pay their taxes, they need to know their neighbors and competitors are doing the same," said IRS Commissioner Mark W. Everson in the statement. "Non-registered fuel dealers can expect to see stepped up enforcement of compliance with the laws governing imported fuels." In the "background" section of the proposed regulation, which was issued "without prior notice," IRS said it "has found that abusive situations exist with regard to the entry of taxable fuel into the U.S. For example, some enterers [importers] are not registered and are not paying the tax on their fuel entries. This not only gives non-compliant dealers a competitive advantage over their compliant competitors, but it also deprives the U.S. Treasury of revenue intended for the Highway Trust Fund." Written comments are due at the IRS by Oct. 28. Sometime after that date, the proposed regulations, identical to the temporary ones, will take effect. To view the regulations, visit www.irs.gov/newsroom/article/0,,id=127748,00.html.