The Crow Creek Sioux Tribe has settled its tax debt with the IRS.

The Crow Creek Sioux Tribe has settled its tax debt with the Internal Revenue Service and lined up a loan that will enable it to buy back the 11 square miles of land the IRS sold at auction in December, the tribal chairman said.
A stipulation filed in court last week indicates the tribe will dismiss its lawsuit, which sought to prevent the IRS from selling the Hyde County land. That will cancel a May 4 trial.
The IRS took the unusual step of seizing and selling the land because the tribe refused to pay $3.12 million in employment taxes, penalties and interest it racked up since 2001.
At $2.58 million, the winning bid did not fully satisfy the debt. But tribal chairman Brandon Sazue, who met with government officials in Washington last week, said the IRS is forgiving what’s left.
“We don’t owe the IRS anything at this point in time, as long as we drop the lawsuit,” Sazue said.
A spokesman for the Department of Justice’s tax division acknowledged a deal was struck but could not provide any detail.
“We were glad we were able to reach an amicable resolution of the case,” Charles Miller said.
The next step for the tribe is buying back the land; the auction sale came with a provision that the tribe had 180 days to do so.
Sazue said the Shakopee Mdewakanton Sioux in Minnesota have agreed to loan the Crow Creek Sioux $3 million to buy back the land. Shakopee Mdewakanton spokeswoman Tessa Lehto could not confirm the loan.
The Crow Creek also are working with the government to make sure they don’t get in tax trouble again. The tribe’s written complaint in the court file says they weren’t paying taxes because the Bureau of Indian Affairs wrongly advised them they were exempt.
Sazue said he wants to set up a mechanism that subtracts taxes from tribal councilors’ paychecks.
The chairman said he’s excited to put the tax problems to rest and get back the land.
Sazue spent three weeks on the land in December fasting and praying in protest of the IRS action. He said the tribe’s plight has spurred sympathetic calls and e-mails from as far as Europe and Australia.
“If I hadn’t set my trailer up there I don’t think we’d be where we are today,” he said.