Judge bars California from releasing tribe's gaming funds to IRS

A federal judge has barred the California Gambling Control Commission from releasing gaming funds held in trust for the Alturas Indian Rancheria.

Without the tribe's consent, the state voted to release the funds to the Internal Revenue Service, purportedly to pay an outstanding debt. Judge Lawrence K. Karlton said the state's action violated the Class III gaming compact and the tribe's sovereignty.

"There is a public interest in the collection, by the IRS, of unpaid taxes. However, the court finds that the public’s interest in respecting tribal sovereignty and in honoring the state-tribal compact outweighs that interest," Karlton wrote in his decision to grant a temporary restraining order requested by the tribe.

According to the decision, the state has been withholding the gaming funds held in trust for the Alturas Rancheria due to an ongoing leadership dispute within the tribe.

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Federal Court Issues TRO Preventing Cal. Gambling Control Commission from Releasing Funds in Accordance with IRS Levy (Turtle Talk 8/12)