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Statement for the Record by Rep. Devin Nunes 

H.R. 3043 – Tribal General Welfare Exclusion Act 

Mr. Speaker, considering a committee report will not accompany H.R. 3043, which is being 

considered by the House today, I take this opportunity as the author of the legislation to provide 

some context and congressional intent. 

Under current law, taxpayers must generally include all items of income in computing gross 

income. Internal Revenue Service (IRS) guidance has established a general welfare exclusion under 

which payments made to individuals by governmental entities pursuant to legislatively provided 

social benefit programs for the promotion of the general welfare are not included in the recipient’s 

gross income. To qualify under the general welfare exclusion, payment (1) must be made under a 

government program; (2) must be made for the promotion of general welfare; and (3) must not be 

made as compensation for services. 

In evaluating Indian tribal government programs under the general welfare exclusion, including the 

second prong of this test ("for the promotion of general welfare"), the IRS has frequently insisted 

that tribal benefits be based on individualized determinations of financial need. This stipulation 

prevents the general welfare exclusion from covering programs designed to provide substantially 

equal benefits to all qualifying members of a tribe or to provide benefits based on determinations of 

needs that are not financial in nature. These needs would include health coverage programs, 

education and cultural programs, elder programs, and housing programs. 

Under IRS guidance released in June 2014, however, the IRS will conclusively presume that 

payments from Indian tribes to tribal members and their spouses and dependents will qualify under 

the general welfare exclusion without a determination of need if certain requirements are met. 

Under Revenue Procedure 2014-35, the payments (1) must be made pursuant to a specific Indian 

tribal government program with written guidelines; (2) must not discriminate in favor of the tribe’s 

governing body and be made available to all qualifying members of the tribe; (3) must not be 

compensation for services; and (4) must not be lavish or extravagant. In addition, only certain 

types of programs that meet the procedural requirements will qualify for the conclusive 

presumption. The Revenue Procedure lists 23 such non-exclusive qualifying programs covering 

housing, education, elder care, health care, culture, and other welfare projects. Taxpayers may 

apply the rules retroactively to file for refunds for any open tax years. 

The provisions in H.R. 3043 would codify this IRS guidance, specifically applying the general welfare 

exclusion to Indian tribes and payments received by tribal members, their spouses and children. 

The bill mandates that tribal government benefits would qualify for exclusion under the general 

welfare doctrine so long as the benefits (1) are provided pursuant to a specific Indian tribal 

government program; (2) are available to all tribal members (including spouses and dependents) 

who meet the government program's guidelines; (3) are not lavish or extravagant; and (4) are not 

compensation for services. 

The provisions in H.R. 3043 also require that the tribal program be "for the promotion of general 

welfare," but would not limit its application through conclusive presumption to specific types or 

examples of tribal programs. I expect that the IRS will apply this requirement in a manner that is 

no less favorable than the safe harbor approach in Revenue Procedure 2014-35, and that the IRS 

will not interpret the statute as requiring individualized determinations of financial need where a 

Congressman Devin Nunes 

Statement for the Record – Tribal General Welfare Exclusion Act 

113th Congress 
 

 

 

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administration of federal tax policies affecting tribal governments while ensuring that treaty rights 

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tribal government has established a program consistent with the statute. In construing the 

individual statutory requirements, including a determination of whether a program is “for the 

promotion of general welfare”, it is expected that the IRS will develop regulations that are no less 

favorable to tribes than Revenue Procedure 2014-35, including no limitation of a tribe’s ability to 

address community needs and to make benefits available to all eligible tribal members. This is 

based on the legislative purpose of the bill as well as the specific statutory construction provision in 

Section 2(c) of the bill, which states that "deference shall be given to Indian tribal governments for 

the programs administered and authorized by the tribe to benefit the general welfare of the tribal 

community." 

Provisions in H.R. 3043 also would require the Treasury Department to (1) establish a Tribal 

Advisory Committee to advise the IRS and Treasury on matters relating to taxation of Indians; (2) 

establish and provide training and education for IRS agents and tribal financial officers about the 

new provisions; and (3) suspend audits and examinations of Indian tribal governments and tribal 

members related to the general welfare exclusion until this education has been provided. 

Concerns linger that the IRS may not fully understand the role that general welfare programs play 

in maintaining tribal culture and tradition, and that these issues should be addressed through 

government-to-government consultation rather than through tribal or member audits that may 

deter tribes from preserving culture and tradition or pursuing self-determination. It is intended 

that the Tribal Advisory Committee address these concerns and work with tribes on a governmentto-government basis. This would be accomplished by appointing qualified tribal leaders and in the 

alternative, qualified tribal financial officers to the Tribal Advisory Committee. Such qualified 

individuals would have intimate knowledge of federal Indian law and policy, as well as the financial 

and community needs of Indian tribes. These qualifications would enhance the Department’s 

and principles of tribal self-governance are properly balanced with federal tax policy. 

The provisions in H.R. 3043 codifying the IRS guidance concerning the general welfare exclusion 

would be effective for tax years for which the period of limitations is open as of the date of 

enactment. Taxpayers would have one additional year from the date of enactment to file for a 

refund with respect to any such open tax year. And, the bill would provide the IRS with discretion 

to waive any interest and penalties under the Code for any tribe or tribal member in connection 

with the general welfare exclusion. 

Mr. Speaker, I appreciate the opportunity to provide clarity, context, and congressional intent for 

this legislation. 

Congressman Devin Nunes 

Statement for the Record – Tribal General Welfare Exclusion Act 

113th Congress