n-98-45.pdf

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# Part III - Administrative, Procedural, and Miscellaneous

Former Indian Reservations in Oklahoma

## Notice 98-45

This notice defines "former Indian reservations in Oklahoma"
for purposes of § 168 (j) (6) of the Internal Revenue Code, as
amended by the Taxpayer Relief Act of 1997 (the Act), Pub. L. No.
105-34, 111 Stat. 788.

BACKGROUND

Sections 13321 and 13322 of the Omnibus Budget
Reconciliation Act of 1993, Pub. L. No. 103-66, 1993-3 C.B.
1, 146-151, amended the Internal Revenue Code by adding two
provisions to the Code to establish two Indian reservation-based
federal tax incentives. Section 45A generally provides an Indian
employment credit for certain wages and health insurance costs
paid or incurred by an employer whose employees are enrolled
members of an Indian tribe or the spouses of enrolled members of

an Indian tribe who perform substantially all their services for
the taxpayer within an Indian reservation and have a principal
place of abode on or near such reservation. Section 168 (j)
generally provides more favorable depreciation for qualified
Indian reservation property (that is, certain depreciable
property used predominantly in the active conduct of a trade or
business within an Indian reservation and not regularly used or
located outside the reservation) . Section 45A applies to wages
and health insurance costs paid or incurred after December 31,

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1993, in a taxable year that begins on or before December 31,
2003. Section 168 (j) applies to property placed in service after
December 31, 1993, and on or before December 31, 2003.

Section 45A (c) (7) states that the term "Indian reservation"
has the meaning given the term by § 168 (j) (6). Section 168 (j) (6)
(prior to its amendment by the Act) provided that, for purposes
of § 168 (j), the term "Indian reservation" means a reservation,
as defined in either section 3 (d) of the Indian Financing Act of
1974, 25 U.S.C. § 1452 (d), or section 4(10) of the Indian Child
Welfare Act of 1978, 25 U.S.C. § 1903(10). Section 3 (d) of the
Indian Financing Act of 1974 defines reservation to include
"former Indian reservations in Oklahoma."

Section 1604 (c) of the Act (generally effective as of
January 1, 1994) amended the definition of "Indian reservation"
under section 168 (j) (6) . Under the amendment, only lands within
the jurisdictional area of an Oklahoma Indian tribe (as
determined by the Secretary of the Interior) that are recognized
by such Secretary as an area eligible for trust land status under
25 CFR Part 151 as in effect on August 5, 1997 (the date of
enactment), are "former Indian reservations in Oklahoma."
DETERMINATION OF SECRETARY OF THE INTERIOR AS TO THE MEANING OF
FORMER INDIAN RESERVATIONS

The Secretary of the Interior has determined that, for
purposes of section 168 (j) (6), lands that are within the
jurisdictional area of an Oklahoma Indian tribe are those lands
within the boundaries of the last treaties, Executive Orders,

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federal agreements, federal statutes, and Secretarial Orders with
the Oklahoma tribes. The Secretary of the Interior also has
determined that any lands within the boundaries of the last
treaties, Executive Orders, federal agreements, federal statutes,
and Secretarial Orders with the Oklahoma tribes are lands
eligible for trust land status under 25 CFR Part 151.

The areas of Oklahoma located outside the boundaries of the
last treaties, Executive Orders, federal agreements, federal
statutes, and Secretarial Orders with the Oklahoma tribes are (1)
the Cherokee Outlet, (2) No Man's Land (also known as the
Panhandle), (3) the historic Greer County, and (4) those former
Seminole and Creek domain lands in central Indian Territory that
were deemed to be "unassigned lands." The location of those
areas in Oklahoma that are outside the boundaries of the last
treaties, Executive Orders, federal agreements, federal statutes,
and Secretarial Orders with the Oklahoma Indian tribes can best
be described in terms of entire present-day counties that are
ineligible (Alfalfa, Beaver, Cimarron, Garfield, Grant, Greer,
Harmon, Harper, Jackson, Major, Texas, Woods, and Woodward) and
present-day counties that are split by the boundaries, that is,
part of the county is eligible and part of the county is not
eligible (Beckham, Canadian, Cleveland, Ellis, Kay, Kingfisher,
Logan, Noble, Oklahoma, Pawnee and Payne) .

ADDITIONAL INFORMATION

The Arkansas-Oklahoma District of the Internal Revenue
Service will make available a plain language description of the

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boundary for each split county. Written requests should include
the name of the applicable split county and be sent to the
following address: Internal Revenue Service, 55 North
Robinson Street, Mail Stop 4030-OKC, Attention: RSC,
Oklahoma City, OK 73102. The plain language
description is also available on the Internet at
http://www.irs.ustreas.gov/prod/hot/atn/oklahoma.html.
DRAFTING INFORMATION CONTACT

The principal author of this notice is Winston H. Douglas of
the Office of the Assistant Chief Counsel (Passthroughs and
Special Industries) . For further information regarding this
notice contact Mr. Douglas on (202) 622-3110 (not a toll-free
call) . For information concerning the boundaries, contact the
Arkansas-Oklahoma District office on (405) 297-4690 (not a
toll-free call) .