In 1982, the U.S. Congress passed the Indian Tribal Governmental Tax Status Act, which was made part of the Internal Revenue Service and recognized as Section 7871 of the IRS Code. Section 7871 treats tribal governments as state governments for a variety of tax purposes. One of these purposes is to allow tribal governments (and their political subdivisions) to receive tax-deductible donations as do nontribal 501(c) (3) organizations.
As more federally recognized tribes continued to open business ventures employing thousands of individuals and generating millions of dollars into local economies, Congress decided to include basic information that will assist tribes with their planning should they decide to utilize Section 7871 of the IRS Code.
The information included in this appendix is used with the kind permission of the First Nations Development Institute. Individuals working with tribes or organizations in some way affiliated with federally recognized tribal governments and interested in forming a nonprofit organization on reservations may contact the First Nations Development Institute for further information and assistance. For more information on this topic, see their website: