The Internal Revenue Service is taking aim again at the Miccosukee Tribe, only this time it wants a federal judge to find Chairman Colley Billie in contempt of court for not cooperating in the agency’s income-tax probe of Billie’s political rival.
The IRS made its move after U.S. District Judge Kathleen Williams had ordered Billie to turn over financial documents and answer questions about the widening personal tax liabilities of his predecessor, former longtime Chairman Billy Cypress.
This week, Williams ordered the contempt-of-court showdown for Monday, days before Billie and Cypress face off in the West Miami-Dade tribe’s Nov. 10 election to pick its leader.
Billie did not want to comment for this story because of the upcoming Miami federal court hearing, tribe attorney Bernardo Roman III said Wednesday.
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Although the IRS acknowledged that Billie turned over some W-2 income tax forms related to Cypress, the current chairman has refused to provide other tribal records or answer an IRS agent’s questions in person. Billie first consented to comply with an IRS summons, but then changed his mind, citing his Fifth Amendment rights against self-incrimination.
“Billie’s last-minute attempt to invoke his Fifth Amendment rights in no way relieved Billie of his responsibility to abide by the court’s order,” Justice Department lawyers wrote in a motion seeking contempt sanctions.
The case of Billie having to defend himself against potential sanctions — fines or incarceration — is rich with irony. When he took over the reins of the tribe in early 2010, Billie turned against Cypress with a vengeance. He fired two former U.S. attorneys who represented the tribe during Cypress’ tenure; he authorized the tribe to sue those lawyers for alleged malpractice; and he ultimately directed the Miccosukees to sue Cypress for allegedly embezzling $26 million over the past decade.
Moreover, the IRS is also targeting the tribe for its alleged failure to withhold potentially tens of millions of dollars in income taxes on its annual distributions of casino gambling profits to members -- a policy authorized by Cypress as Miccosukee chairman. So far, the IRS has placed $170 million in tax liens on the tribe for back taxes, interest and penalties.
Details of Cypress’ tax problems surfaced in 2010, when the IRS filed a complaint saying he owed the government almost $2.8 million in taxes, interest and penalties on $6.65 million in unreported income in 2003-05.
About half of that unreported income came from cash advances on tribe-issued credit cards, according to IRS records filed in federal court. He used the money for spending binges at his tribe’s own gambling facility off the Tamami Trail and during trips to Las Vegas; Biloxi, Miss.; Foxwoods, Conn., and several other casino venues in 2003-05, court records show.
He also made hundreds of charges at restaurants and retail stores, including American Airlines Arena, the former Pro Player Stadium and Burdines/Macy’s.
The IRS asserted all that spending amounted to taxable income, claiming his total income was $10.7 million for that three-year period.
Now the IRS is pressuring his rival, Billie, to turn over personal income-tax documents and other records related to Cypress’ tax liabilities for later years, 2006-2010.
“The documents produced are substantially incomplete,” IRS Agent James Furnas wrote in a court declaration.