Congress Does Right Thing! Gets IRS Away From Tribal Governments

Bryan Brewer

Chief Sitting Bull said, “Let us put our minds together and see what lives we can make for our children.” And, today, as we struggle to provide an education for our children, extend health care to our youth, families, and elders, and provide tribal government services to our Native people, we rely on our Treaties.

When the IRS came out to tax our tribal government programs and services, auditing cultural events, burial payments, elder programs, back to school supplies, and housing repairs, tribal leaders said, “We have treaty rights!” But the IRS said, “We have our Tax Code,” and they didn’t listen to us. But our Nation-to-Nation relationship is directly with the United States, not the IRS.

And last week, the Senators and Representatives listened. H.R. 3043, the Tribal General Welfare Exclusion Act was sponsored in the House by Congressman Devin Nunes, Ron Kind and 60 others. Senator Moran sponsored S. 1507 with Senator Heitkamp—and in the end, 25 Senators co-sponsored the Act.

Representative Nunes said, “This bill would clarify the tax code so that spending by Native American tribes on health care, housing, education, care for the elderly and disabled, and other programs for the good of the tribe will be excluded from taxes. These programs were traditionally tax-exempt, but in recent years the IRS has informally reinterpreted the rules in order to tax more and more of these programs. The agency has subjected tribes to expensive and intrusive audits. With their unique history of tribal sovereignty, Native Americans should not be subjected to arbitrary tax enforcement.” On Tuesday, September 16, the House passed the Act by a two-thirds voice vote!

Senate Finance Committee Chairman Ron Wyden quoted Chairwoman Dee Pigsley, Siletz, “For several years, the IRS has sought to tax tribal government programs and services. This has undermined tribal sovereignty and hindered economic and social development.” Wyden concluded, “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.”

Senator Moran said, “The term general welfare is in the Preamble to the Constitution and the power and duty of governments to promote the general welfare is at the core of our service to the people. Indian [nations], through treaties, agreements, and statutes, reserved their original, inherent rights to self-government and Tribal Governments are in the best position to determine the general welfare interests of the Indian people. HR 3043 and S 1507 are intended to respect the right of Indian tribes to provide for the general welfare of tribal members.”

Senator Heitkamp said the Act means respect for Indian sovereignty, protects tribal government programs and services, and provides clear guidance that the IRS is intended to fulfill its earlier commitment to preserve a safe harbor for a list of tribal government programs.

Senator Wyden gave special thanks to Senator Thune and Senator Stabenow for their efforts to move the bill out of the Senate Finance Committee. On September 18, 2014, Senator Begich presided as the Senate voted for the Act by Unanimous Consent!

The purpose of the Act is to provide a durable, lasting rule of statutory protection for Indian Self-Determination and Self-Government. Respect for tribal government determinations about how to provide for the general welfare of our tribal citizens. Under the Tribal General Welfare Exclusion Act, tribal programs and services are excluded from income tax.

The Act adopts the Treaty Canon of Construction: ambiguities resolved in favor of our tribal government, deference to tribal government determinations of how to provide for the general welfare, and establishment of an education policy on Indian treaties for the IRS and a tribal advisory committee for policy guidance to the Treasury Secretary.

We thank Representatives, Krist Noem, Betty McCollum, Ben Ray Lujan and Steve Daines and all of the co-sponsors. Special thanks to Rep. Devin Nunes, Ron Kind, Kevin McCarthy, John Boehner, Nancy Pelosi and as always—Tom Cole from the Chickasaw Nation.

We thank the Senators—Senators Johnson and Thune, Hoeven, Franken and Klobuchar, Tester and Walsh, Johannes and Fischer, Begich and Murkowski, Udall and Bennet, Udall and Heinrich, Murray and Cantwell, Wyden and Hatch, Roberts, Reid and McConnell and so many, many others. Special thanks to Senator Jerry Moran and Heidi Heitkamp.

Now, with all respect, Indian nations and tribes call upon President Obama to hold a signing ceremony with us to commemorate this Indian Self-Determination legislation and to honor our treaty rights and our Nation-to-Nation relations.

Bryan Brewer is the president of the Oglala Sioux Tribe.

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