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Remarks by Dr. Elaine Buckberg, Treasury Point of Contact for Tribal Consultation and 

Deputy Assistant Secretary for Policy Coordination in the Office of Economic Policy, for 

the Tribal Consultation Listening Session held during the United South and Eastern Tribes 

Impact Week Meeting 

As Prepared for Delivery 

INTRODUCTION 

Good afternoon. My name is Elaine Buckberg, and I am the Treasury’s Point of Contact for 

Tribal Consultation. I also serve as Deputy Assistant Secretary for Policy Coordination in the 

Office of Economic Policy. 

I’d like to thank USET for inviting me to participate in their meetings and making this space and 

time slot available for a Treasury Department listening session. 

As always, I want to emphasize at the outset how much Treasury respects and values the 

sovereign-to-sovereign relationship between your tribal governments and the Federal 

government. 

We are committed to tribal consultation as part of the government to government dialogue 

between the federal government and tribes, as sovereign nations. The tribal consultation process 

allows us to better understand your concerns, your needs, and your circumstances—and to better 

address them. 

We recognize the many challenges facing tribal nations today. We thank you for your 

willingness to work with us to find ways to make our governments more responsive and 

effective. 

Before we begin the listening portion of today’s meeting, I want to update you on Treasury 

initiatives affecting tribes in the areas of tax, economic development, and access to credit. I 

know tax issues are an important policy priority for tribes, so let me begin there. 

 

GENERAL WELFARE EXCLUSION 

As many of you are aware, the general welfare exclusion is an administrative exclusion under 

which certain payments are not included in a recipient’s taxable income. These payments 

generally are made to or on behalf of individuals by governmental units under certain social 

benefit programs for the promotion of the general welfare. To qualify under the general welfare 

exclusion, the payments must (1) be made pursuant to a governmental program, (2) be for the 

promotion of the general welfare (that is, based on individual or family need), and (3) not 

represent compensation for services. 

The general welfare exclusion does not restrict the benefits a tribe may provide its members. As 

sovereign governments, tribes are free to provide benefits on whatever basis they see fit subject 
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to other provisions of law. But the general welfare exclusion determines whether the benefits 

provided by tribal governments to their members should be included in the taxable income of the 

benefit recipient. 

In December 2012, the IRS issued preliminary guidance on Indian Tribal government benefits 

covered by the general welfare exclusion. We received a number of thoughtful comments from 

tribes and are currently considering those comments in preparing to issue final guidance. We 

expect to issue final guidance sometime this spring. 

Let me also speak to the implementation of the interim guidance. The IRS Office of Indian 

Tribal Governments began implementing the preliminary guidance as soon as it was announced 

in December 2012. 

If any new audits relating to GWE have arisen since the preliminary guidance was issued, those 

would have been reviewed at the national level of the IRS Office of Indian Tribal Governments 

to ensure consistency in the application of the new guidance. The guidance is applicable to those 

prior taxable years for which the period of limitation on credits and refunds has not expired. If a 

GWE-related audit was concluded prior to the issuance of the new guidance, tribal members may 

be able to remedy the prior decision by filing an amended return based on the new guidance. 

There were some audits already in process that involved GWE as a secondary issue. Most of 

those GWE audit issues were immediately resolved based on the preliminary guidance. During 

the past year, the IRS has worked with tribal representatives and field staff to help them 

incorporate the new guidance into their operations. 

While previous GWE audit issues have been raised to our attention, I believe these are behind us. 

If you have specific concerns tied to audit activity involving a particular tribe since December 

2012, please contact Joe Kincaid, Acting Director of the IRS Indian Tribal Governments 

Program, or Christie Jacobs, Director of IRS ITG. We are optimistic that the forthcoming final 

guidance will resolve GWE issues going forward. 

PER CAPITA ACT GUIDANCE 

Last week, we conducted a tribal consultation via conference call to discuss forthcoming 

guidance concerning the federal income tax treatment of per capita distributions made to Indian 

tribe members from funds held in trust by the Secretary of the Interior. Over 170 callers 

participated in the consultation call. 

As you probably know, generally, funds may be accepted by the Secretary of the Interior on 

behalf of federally recognized Indian tribes and certain individual Indians who have an interest in 

trust lands, trust resources, or trust assets. The forthcoming guidance will clarify the income tax 

exclusion for per capita payments made to Indian tribe members from funds held by the 

Secretary for the benefit of the tribe. 

Under the Per Capita Act of 1983, tribes are authorized to make trust per capita distributions 

from these accounts directly to tribal members when the distributions conform to standards 

established by the Secretary of the Interior. In September 2012, Treasury and the IRS released 
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guidance on per capita distributions from specific settlements. Since that time, we have received 

many requests that we address the tax status of per capita payments more broadly. We 

understand that this is a high priority for Indian Country. 

Expanding guidance to per capita distributions more broadly is not as simple as restating the 

existing guidance on settlements. With the settlements, we know the precise source of the 

money to be distributed per capita. In the general case, trust funds administered by the Interior 

Department may originate from a range of income sources. Therefore, over recent months, in 

response to your requests that we issue more general guidance on this matter, we have worked 

closely with the Department of Interior’s Bureau of Indian Affairs to understand their policies 

and operations relating to the leasing of Trust land, income entering tribal Trust accounts, and 

per capita distributions from those Trusts. 

We expect this new guidance will establish a general rule that per capita payments to tribal 

members that are made from trust accounts administered by the Interior Department are not 

subject to the federal income tax for individuals. The guidance will also likely provide 

exceptions to the general rule to account for the rare but occasional attempt to disguise taxable 

income as a non-taxable per capita payment. Examples of this may include: disguised business 

profit distributions, disguised compensation, and gaming revenue disguised as trust funds. 

We know how important tribal trust assets are to you, so we recognize the significance of this 

guidance. I greatly appreciate that so many tribal representatives have taken the time to discuss 

this with us so that we can make the guidance as effective as possible. 

CDFI FUND STUDY 

Finally, I would like to mention briefly that Treasury’s Community Development Financial 

Institutions Fund, or CDFI Fund, has begun a study to address the challenges of access to capital 

in Native Communities. We expect the study to provide a detailed analysis and quantitative 

research that can lead to actionable recommendations for improving access to capital and credit 

in Native Communities. These types of studies are tremendously important—a study in 2001 led 

to the creation of the highly-regarded Native American CDFI Assistance Program, which 

provides both funding and technical assistance for the delivery of financial services in Native 

Communities. I encourage all of you to participate in this new study. 

There will be CDFI Native Initiatives consultation tomorrow, on Tuesday, February 4, 2014, 

from 1:00 am - 6:00 pm. It will be held in the Crystal Gateway Marriott - Salon A. I hope you 

will be able to participate in this consultation and provide input for the study. 

TREASURY STAFF INTRODUCTIONS 

In these opening remarks I’ve mentioned the three issues that are on our front burners this spring. 

Since this is a general listening session, I have invited Treasury and IRS staff members who 

work in a variety of specialized areas so that they can hear your comments on the issues that they 

cover. The offices and bureaus represented here include the IRS Indian Tribal Governments 

program, the IRS General Counsel’s office, the offices of Tax Policy and Economic Policy, the 
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Community Development Financial Institutions’ Native Initiatives, and the Bureau of the Fiscal 

Service. 

CONCLUSION 

We have the use of this room until 3:30. Please note that we must close this session promptly at 

3:30 because I have a 4:00 meeting at the main Treasury building with the Deputy Secretary of 

the Treasury. Please forgive me, as I will need to leave immediately after this session and will be 

unable to linger to talk further. Also, in deference to others, I suggest that each leader keep their 

remarks to four minutes or less so others may also speak.