Miccosukee Tribe Blames Ex-Lawyer in Ongoing IRS Dispute

Going to a backup defense in their ongoing tussle with the IRS, the Miccosukee Indians are blaming the tribe's former attorney for "faulty advice."

In court filings, tribal members admitted for the first time that they owe the federal government $25.8 million back taxes and penalties from their South Florida casino profits.

The admission surfaced in the Miccosukees' malpractice lawsuit against former counsel Dexter Lehtinen. Tribal members allege that Lehtinen advised them they owed no personal income tax on gambling proceeds.

Prior to the internal squabble, tribal leaders asserted that the distributions were exempt from IRS taxation -- a position that appeared to fly in the face of the Indian Gaming Regulatory Act, which requires tribes with gambling facilities to report all member payments to federal authorities.

The law specifically says such "payments are subject to federal taxation."

Unlike the Seminole Tribe, the Miccosukees have never filed a required "revenue allocation plan" with the Bureau of Indian Affairs to show how much gambling income from their bingo-style slot machines and poker games is distributed to members.