General Welfare Exclusion

Governance and Economic Opportunities

The Tribal General Welfare Exclusion Act of 2014 (GWE Act) codifies the Internal Revenue Service (IRS) Revenue Procedure (Rev. Proc. 2014-35). The GWE Act firmly supports tribal self-determination, provides tribal leaders with the flexibility to determine which tax-exempt programs and services improve the welfare of their citizens, and ensures that programs and services, which seek to restore and promote tribal cultural heritage are uniformly upheld. Further, the GWE Act requires ambiguities in the statute to be resolved in favor of Indian tribes. This marks a distinct departure from the way the IRS has historically interpreted ambiguities and formed tax policy. The GWE Act directs the Secretary of the Treasury to:

  • Establish a Treasury Tribal Advisory Committee (TTAC) to advise on matters relating to taxation of tribal governments;
  • Require the training and education of IRS agents on federal Indian law and the implementation of the new provisions; and
  • Temporarily suspend the general welfare examinations of tribal governments.

Through the enactment of the TTAC Charter, the Department of Treasury (Treasury) has announced a call for nominations for committee members and comments on selection criteria that should be considered when reviewing applicants. The TTAC will be made up of seven representatives with the Treasury selecting three members and Congress selecting the remaining four members. The TTAC members will serve four-year terms, however those appointed by Treasury will serve an initial two-year term. The TTAC is an open advisory committee that is subject to the Federal Advisory Committee Act. The committee members have a broad mandate to "advise the Secretary on matters relating to the taxation of Indians". 

NAFOA will continue to work with tribal governments, the IRS, Treasury, and Congress to ensure the GWE Act is implemented as Congress intended and the guidance is used as a basis for general welfare regulations by: (1) Advising the Treasury on selection criteria that should be considered when reviewing TTAC applicants to ensure the TTAC is comprised of leaders who will strongly advocate for tribal interests and offer a substantive tribal voice on all tax policy issues affecting tribal governments; (2) Ensuring that IRS field agents are properly trained and educated on tribal sovereignty, treaty rights, and diplomacy concerning tribal governments; and (3) Ensuring audits are suspended regarding general welfare programs.

Congress will be expected to act on their respective recommendations shortly after with the hope of formalizing the advisory committee in 2017.

Tribal General Welfare Exclusion Act of 2014 (Public Law 113-168)

Treasury Tribal Advisory Committee Charter

Federal Registry Notice

IRS Notice 2015-34

Revenue Procedure 2014-35