[Congressional Record (Bound Edition), Volume 160 (2014), Part 10]
[Senate]
[Page 14968]
[From the U.S. Government Publishing Office, www.gpo.gov]




              TRIBAL GENERAL WELFARE EXCLUSION ACT OF 2014

  Mr. WYDEN. Mr. President, I rise as chairman of the Senate Finance 
Committee to strongly support the Senate's passage of an important tax 
bill, H.R. 3043, the Tribal General Welfare Exclusion Act of 2014. This 
bill will improve the application of the Federal income tax in Indian 
Country and in doing so will reflect appropriate respect for the 
sovereignty of tribal governments.
  By way of background, the Federal Tax Code treats most payments that 
individuals receive, and the value of some services they receive, as 
taxable income. There is an exclusion, though, for payments and 
services received under programs conducted by State and local 
governments. It's called the general welfare exclusion, and it covers 
things like housing assistance, emergency medical care, and education 
assistance. These are traditionally treated as nontaxable.
  Unfortunately, the IRS has had difficulty applying the general 
welfare exclusion when it comes to benefits provided by tribal 
governments to tribal members. In order to determine which benefits 
were excluded from taxation, the IRS began conducting aggressive 
audits, leaving the tax treatment of many tribe-provided benefits in 
doubt. As Delores Pigsley, chairman of the Confederated Tribes of 
Siletz Indians Tribal Council, put it in a letter to me, ``for several 
years, the IRS has sought to tax tribal government programs and 
services.'' This, in turn, has undermined tribal sovereignty and 
hindered economic and social development.
  I am pleased to report that there has been some significant progress. 
In June, the IRS issued a revenue procedure clarifying the application 
of the exclusion, and the procedure was a good step in the right 
direction, clearing up some questions and reflecting an improved 
dialogue between the IRS and tribes. However, IRS guidance is not a 
congressional statute; we need to lock these improvements into 
statutory law, as well as expand on them such as by establishing a 
Tribal Advisory Committee to help the Treasury Department and the IRS 
understand about how best to address tax issues affecting Indian 
Country.
  The bill we are considering today would accomplish these goals. It 
codifies and expands IRS regulations, draws clear lines, and gives 
greater respect to tribal institutions and programs.
  I would like to acknowledge the principal sponsors of the Senate 
version of the bill, Senators Moran and Heitkamp, for their leadership. 
I also would like to thank Senators Stabenow, Thune, and other members 
of the Finance Committee, who have urged the committee to move forward 
on this issue.
  Tribal governments have a long history of providing critical benefits 
to tribal members, and these programs are fundamental to the 
sovereignty and cultural integrity of tribes. Tribes, and not the IRS, 
are in the best position to determine the needs of their members and 
provide for the general welfare of their tribal citizens and 
communities. I know this bill has the support of tribes in my home 
State of Oregon and will benefit tribes and tribal members across the 
Nation. I urge all Senators to support the bill.

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