New Tax Fairness for Tribes and Their Members

by Brad Jolly, Partner
Oct 9, 2014

On September 16th and 18th, the House and Senate, respectively, each passed the Tribal General Welfare Exclusion Act (H.R. 3043) and President Obama signed it into law on September 26th. The new statute amends the Internal Revenue Code to make it clear that tribal members are not to be taxed for general welfare benefits provided through tribal programs. In other words, general welfare benefits received from tribes will be treated the same, for income tax purposes, as such benefits received from a state or the federal government.

The bill also requires IRS field agents to obtain training on federal Indian law and implementation of the new statute. Under the statute, the Secretary of the Treasury is also authorized to waive any outstanding audits or penalties related to general welfare benefits received from tribes.