TN 36 (08-06)

RS 01901.700 Services Performed by Members of Indian Tribal Councils


IRS Revenue Ruling 59-354; 25 USC 476; 26 USC 501

A. Background

1. Federal Recognized Tribes

IRS Revenue Ruling 59-354 provides a limited tax exception for amounts paid to tribal council members for services performed by them as council members. Amounts paid for services performed by Indian tribal council members do not constitute wages for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act and the collection of income tax. This ruling is an interpretation by the IRS Counsel and is based on a review of many court decisions and legislative enactments pertaining to Indian tribes. Revenue Ruling 59-354 only pertains to Federally-recognized tribes. Internal Revenue Procedure 2002-64 contains a listing of the Federally-recognized tribes at Tribes can get Federal recognition only through an act of Congress. If an entity is Federally-recognized, State recognition is moot.

2. State Recognized Tribes

State tribes are considered to be exempt organizations where they fit into the same section of the law as charitable organizations (exempt from Federal income tax). All services performed by members of State tribes are covered under Social Security the same as services performed for non-profit organizations beginning January 1, 1984. See POMS RS 01901.540 for the coverage rules for services performed for nonprofit organizations. Tribal members can provide either a copy of their determination letter or IRS Form 990, Return of Organization Exempt from Income Tax to verify that their tribe is not a Federally-recognized tribe and is considered an exempt organization. IRS Form 990 is public information and may be accessed via The Economic Research Institute’s website at

B. Definitions

1. Indian Tribal Councils

Governmental institutions established as a grouping of tribes with common interests who voluntarily join together to provide advisory and/or program services to members of the tribe(s).

2. Tribal business enterprises

Businesses owned and/or controlled by an Indian tribal government. These entities include casinos, restaurants, medical clinics, housing authorities, gas stations, and a variety of other industries.

3. Indian tribal council members

Generally, the tribal council consists of tribal members who are usually elected and answer only to the members of the Indian tribe. However, sometimes council members are appointed by clan mothers, or inherit their position, and are therefore not elected. When council members are paid a salary or stipend, their role is the exercise of governmental authority. No one controls or directs their actions.

4. Salaried employees of Indian tribal councils

Salaried employees of Indian tribal councils consist of employees or staff of the council or tribe who perform such services as secretary or administrative assistant for a council member, Director of Tribal Housing, tax collectors and assessors, justices of the peace and members of boards and commissions.

C. Policy - for services performed

1. Indian tribal council members

Services performed by members of Indian tribal councils in their capacities as council members do not constitute employment under Section 210 of the Social Security Act. Therefore, remuneration paid to Indian tribal council members is not subject to taxation under the Federal Insurance Contributions Act and their services are not covered under Social Security and Medicare.

NOTE: Earnings posted for members of Indian tribal councils for tax years 2005 and earlier should remain on earnings records and used in applicable benefit computations.

2. Other tribal employees/Private tribal business enterprise employees

Services performed by other employees of tribal councils and by employees of private tribal business enterprises are covered employment under Social Security and Medicare, unless otherwise excluded under the Social Security Act (such as fishing rights-related activities). Employees can be salaried, hourly, seasonal, part-time or full-time.

D. References

  • IRS’ Indian Tribal Governments Employment Tax Desk Guide at

  • IRS Revenue Ruling 59-354 at

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RS 01901.700 - Services Performed by Members of Indian Tribal Councils - 07/15/2016
Batch run: 07/15/2016