Miami Herald – On the hook for $170 million in income taxes and related bills, the Miccosukee Tribe of Indians is suing rather than settling with the Internal Revenue Service over the tribe’s failure to report and withhold income from its gambling distributions to members.

But what makes the federal lawsuit filed in Miami so distinctive is that the tribe has mounted the counteroffensive not only against its longtime nemesis, the IRS, but also against Attorney General Eric Holder and the secretaries of the Treasury and Interior departments.

The crux of the suit: The contention that in 2005, the IRS reached a “secret deal” with the Miccosukees’ former Chairman Billy Cypress, his personal lawyer and the tribe’s general counsel to hand over the financial records of certain tribal members — a “bargain” that the U.S. government has exploited to wage an unconstitutional tax war against the West Miami-Dade tribe.

The tribe’s leader, Colley Billie, claims in the suit that he and the Miccosukee tribe members only discovered the deal in 2010 after Cypress left office.

“This suit involves willful, purposeful and malicious actions by the United States … by selectively targeting the Miccosukee Tribe and its people for federal tax audits,” the suit, filed earlier this month, said.

The IRS and the other federal agencies declined to comment.

In its long-running battle with the Miccosukee Tribe, the IRS has not only slammed the tribe over its gambling distributions. The agency also has smacked hundreds of the tribe’s members with separate bills totaling $58 million for their failure to pay personal income taxes on their share of casino profits from 2000-2005, records show.

The IRS filed tax liens for that period in the Miami-Dade Circuit Court in April. Those liens are likely to skyrocket for subsequent years because the tribe has continued to refuse to report and withhold taxes on the individual allocations, as required under federal law.