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of timber from alloted lands. The Nicodemus case involved the taxability of agricultural lands [???] particularly, from alloted lands. If the Capemin case was ,ost the Nicodemus case was also lost. Even if the Capemin case was won, the it might be won on the narrow, distinguishing issue distinguishing timber income from agricultural income and therefore the Nicodemus cast might still be lost even though the Capemin case might be won. While John Cragun had the primary responsibility for the case and had to argue all points of law, we in our brief, amecias curi, sought to convince the Supreme Court that if the case were won it shouldbe won from all income of alloted alnds and not just from income minerals and timber, which, under the law, might be considered real property and distinguishable from agricultural income. The Supreme Court held with the Indians. It definitely established that an income from the sale of timber from alloted lands was not taxable to the alottee and seemed to contain general language which meant that his was also true as to all other types of income, including agricultural income. At firs the Bureau of Internal Revenue questioned whether the decision was that broad. Bureau representatives in the Northwest again went to work. Finally, on July 23, 1956 the following ruling was issued by the Internal Revenue Service: Income held in trust for or received by the patent holder, which is directly derived from alloted and restricted Indian lands while such lands are held by the United States as trustee, in accordance with Section 5 of the General Loveland Act, is exempt from Federal Income Tax. Citing his authority for that, Squire vs. Capemin. Such exempt income includes rentals, including crop rentals, royalties, proceeds of sales, of natural resources of such lands, and income of such crops grown upon the land and for the use of the land for grazing purposes. Now we have the problem of interpreting what this means. I think it means that all income of any patent holder of allotted Indian lands is exempt from income taxes. I don't think there is any type of income that is not included in this exameption. Certainly the exemption includes income from minerals, oil royalties, agriculture, rental, grazing and timber. where that income is held in trust for the allotee or paid directly to him. Now what steps should be various allottees with this income take to benefit from this ruling. Any Indian who has

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---------- Reopened for Editing 2023-11-28 18:17:46