only 1 of your parents has to be status natives in order for the offspring to become one so generation doesn't matter. you can only gain the status if there is a consecutive lineage in your family of status natives, meaning if either your mother or your father are status natives, you're eligible, but if neither of them are, regardless of how you can prove your native lineage, it won't fly.
i wouldn't know much about taxes exemptions, that's not typically something i discuss with my native family. unfortunately, i do not qualify for status native