1. The income received from the United States by an Indian, a
member of the Osage Tribe, as his share of the royalties from oil
and gas leases made by the tribe and approved by the Secretary of
the Interior, under the Act of June 28, 1906, is subject to federal
income tax under the Revenue Act of 1918.
where the Indian had received a certificate of
competency; where his allotted lands, except the homestead, were
taxable and alienable, and where the income (derived from leases of
lands which had been purchased for the tribe with tribal funds and
subsequently allotted, reserving the oil and gas to the tribe)
belonged to him without restriction. Pp. 283 U. S.
2. Such income is not a gift, nor is it immune from the federal
tax as an instrumentality of government. P. 283 U. S.
38 F.2d 976 affirmed.
Certiorari, 281 U.S. 714, to review a judgment affirming a
decision of the Board of Tax Appeals, 14 B.T.A. 1254, which
sustained a determination of deficiency in income taxes.
Page 283 U. S. 692
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The petitioner is a member of the Osage Tribe of Indians, duly
enrolled as such under the Act of June 28, 1906, [Footnote 1
] and holds a certificate of
competency issued March 5, 1910, pursuant to that Act. He owns his
own original allotment of the tribal lands, and has inherited from
a deceased member a one-half interest in the latter's allotment,
but nothing in this case turns on his ownership of these lands. He
also owns his own original share in the tribal revenues, and, by
inheritance from a deceased member, one-half of the interest in
those revenues to which that member would be entitled if
In the years 1918, 1919, and 1920, petitioner's entire income
was received from these one and one-half shares in the tribal
income from oil and gas leases made by the tribe under the
authority of the Act. The leases were on a portion of the lands
bought by the United States with money belonging to the tribe,
thereafter held in trust for it, and subsequently allotted to its
members as directed by the Act. But, in the division or allotment
of the tribal lands, the oil, gas, and other minerals therein were
expressly reserved to the tribe for a period of twenty-five
Page 283 U. S. 693
years, [Footnote 2
extended to April 8, 1958. [Footnote 3
] Provision was made for the leasing of such
minerals by the tribal council, with the approval of the Secretary
of the Interior, [Footnote 4
and the income from such leases is to be placed in the Treasury of
the United States to the credit of the members of the tribe and
distributed among them quarterly. [Footnote 5
] This was the source of the petitioner's
The petitioner paid income taxes in each of the years mentioned.
Upon the receipt of a deficiency letter from the Commissioner of
Internal Revenue, he instituted a proceeding before the Board of
Tax Appeals in which he claimed that he owed no deficiencies, but
was entitled to a refund of the amounts theretofore paid because he
was exempt from income tax on the sums received. The Board's
decision was for respondent, [Footnote 6
] and was affirmed by the circuit court of
appeals. [Footnote 7
Court granted certiorari. [Footnote
The petitioner urges several arguments in support of the claim
that he is not liable for tax under the Revenue Act of 1918. These
may conveniently be grouped into two main contentions: first, that
the statute evidences no intent to tax petitioner on such income,
and second that, if its language is broad enough to cover his case,
his status or the nature of the income, requires a holding that the
The language of §§ 210 and 211(a) [Footnote 9
] subjects the income of "every individual" to
tax. Section 213(a) [Footnote
Page 283 U. S. 694
includes income "from any source whatever." The intent of
Congress was to levy the tax with respect to all residents of the
United States and upon all sorts of income. The Act does not
expressly exempt the sort of income here involved, nor a person
having petitioner's status respecting such income, and we are not
referred to any other statute which does.
But it is said that, as to the income here taxed, petitioner is
exempt because of his status as an Indian. This assertion requires
a reference to the policy of the government with respect to the
Indians. No provision in any of the treaties referred to by counsel
has any bearing upon the question of the liability of an individual
Indian to pay tax upon income derived by him from his own property.
The course of legislation discloses that the plan of the government
has been gradually to emancipate the Indian from his former status
as a ward to prepare him for complete independence by education and
the gradual release of his property to his own individual
management. This plan has included imposing upon him both the
responsibilities and the privileges of the owner of property,
including the duty to pay taxes. [Footnote 11
] Pursuant to this policy, the Act of 1906
directed the allotment to each member of the Osage Tribe of a
homestead of 160 acres to be chosen by him, which was to be
inalienable and nontaxable for twenty-five years or during the life
of the allottee. After setting apart such homestead to each, the
surplus lands were all to be equally divided and allotted amongst
the members. Section 2, seventh, of the Act provides that the
Secretary of the Interior, after due investigation, may issue
certificates of competency to members of the tribe. It declares
"upon the issuance of such certificate of competency
Page 283 U. S. 695
the lands of such member (except his or her homestead) shall
become subject to taxation, and such member (with exceptions not
here material) shall have the right to manage, control, and dispose
of his or her lands the same as any citizen of the United States.
Since 1910, when he received his certificate, petitioner has
therefore been taxable upon his allotted lands, except his
homestead, and they have been freely alienable.
There are provisions in the Act of 1906 with respect to the
holding, payment, and administration of the royalty shares of
members who do not have certificates of competency, but with these
we are not concerned. The shares of royalty of those holding such
certificates are to be paid to them quarterly.
The petitioner, then, was competent to hold and make any use
(except to grant mining leases) of all his lands. All except his
homestead were taxable, and were freely alienable without control
or supervision of the government. His share of the royalties from
oil and gas leases was payable to him without restriction upon his
use of the funds so paid. It is evident that, as respects his
property other than his homestead, his status is not different from
that of any citizen of the United States. In the process of
gradually changing the relation between the Indian and the
government, he has been, with respect to the income in question,
fully emancipated. Compare United States v. Waller, supra.
It is true, as petitioner
Page 283 U. S. 696
asserts, that, as to his homestead, he still remains a
restricted Indian. But this fact is only significant as evidencing
the contrast between his qualified power of disposition of that
property and his untrammeled ownership of the income in
controversy. The latter was clearly beyond the control of the
United States. The duty to pay it into petitioner's hands, and his
power to use it after it was so paid, were absolute. Work v.
Mosier, 261 U. S. 352
Work v. Lynn, 266 U. S. 161
claim that, with respect to this income, the petitioner was
restricted, and therefore exempt from the tax laid by §§ 210 and
211(a), must fail.
It remains to consider whether there is anything in the nature
of the income itself making it necessary to exempt it from the
broad language of the Revenue Act. It is suggested by petitioner
that the sums received were gifts, and not income. In view of the
facts above recited, this argument is without substance. It is
further insisted that, since the royalties are not taxable so long
as they remain in the hands of the government in trust for the
tribe and undistributed to members, income derived by the
individual member from this fund comes from an exempt source, and
must therefore also be held to be exempt. See Pollock v.
Farmers' Loan & Trust Co., 157 U.
; 158 U. S. 158
601. Royalties received by the government from mineral leases of
Indian lands have been held to be beyond a state's taxing power
(Gillespie v. Oklahoma, 257 U. S. 501
Page 283 U. S. 697
v. Oil Corp., supra
) on the ground that, while in the
possession of the United States, they re a federal instrumentality,
to be used to carry out a governmental purpose. It does not follow,
however, that they cannot be subjected to a federal tax. The intent
to exclude must be definitely expressed where, as here, the general
language of the Act laying the tax is broad enough to include the
subject matter. Heiner v. Colonial Trust Co., 275 U.
; Shaw v. Oil Corp., supra.
may have been the liability of the fund to federal taxation while
it remained in the hands of the government, it cannot properly be
said that the share of it paid as royalties to the petitioner
constituted in his hands an instrumentality of the government, and
was therefore beyond the scope of the tax. Compare McCurdy v.
United States, supra.
There is therefore nothing in the nature
of the income which excepts it from the effect of § 213(a) of the
Revenue Act of 1918.
C. 3572, 34 Stat. 539.
§ 3, Act of 1906, supra.
45 Stat. 1478.
§ 3, Act of 1906, supra.
§ 4, First and Second, and § 6, Act of 1906, supra.
14 B.T.A. 1254.
38 F.2d 976.
281 U.S. 714.
40 Stat. 1062.
40 Stat. 1065.
See United States v. Nice, 241 U.
, 241 U. S. 598
United States v. Waller, 243 U. S. 452
243 U. S. 459
McCurdy v. United States, 246 U.
, 246 U. S. 269
Shaw v. Oil Corp. 276 U. S. 575
276 U. S.
Section 4 of the Act of February 27, 1925, c. 359, 43 Stat. 1008
authorizes the revocation of a certificate held by one of more than
one-half indian blood if the Secretary of the Interior shall find
that the holder is squandering or misusing his or her funds. The
revocation is not to affect the legality of any transactions
theretofore made by reason of the issuance of a certificate, and
all debts existing at the time of revocation are to be paid by the
Secretary or his representative out of the income of the member.
This section has no bearing upon the present case.