Abstract
This article examines a portion of a relatively new federal tax statute, the Tribal General Welfare Exclusion (TGWE), that allows qualified individuals an exclusion from gross income for payments received from American Indian/Alaska Native tribes for any “Indian general welfare benefit.” Indian general welfare benefits are payments made to tribal members by the tribe pursuant to an Indian tribal government program for the promotion of general welfare, such as for health, education, or housing. The TGWE is intended, in part, to promote participation in American Indian tribal cultural and ceremonial practices. To that end, Indian general welfare benefits include payments made for participation in “cultural or ceremonial activities for the transmission of tribal culture.” The statute expressly states that excludable welfare benefits cannot be “lavish and extravagant,” but it does not define what lavish and extravagant means.
This article makes the following contributions: It is the first piece of legal scholarship to examine the new TGWE, and it provides in depth description and explanation of the provision. The article also brings attention to federal tax enforcement on certain transfers between tribes and tribal members, particularly those transfers that occur in the scope of tribes engaging in cultural, ceremonial, or religious practices. This article also analyzes a particular limitation in the language of the TGWE, that transfers from tribes to tribal members may not be “lavish and extravagant,” and makes policy recommendations as to the interpretation of that language as the IRS and consulted tribes move forward with interpretative guidance. Finally, on a broader level, this article seeks to contribute to the greater conversations about tribal self-determination and self-governance and the role federal tax law plays as an instrument of those federal Indian policies.
This article proceeds as follows: Part I provides background on the genesis and evolving history of federal Indian policy and the history and general state of federal taxation in Indian country. Part I also explains the TGWE in detail and other pertinent federal tax doctrines and the canons of construction that apply in federal tax law and federal Indian law. Part II analyzes the meaning of the lavish and extravagant standard and how, or to what extent, the limitation prohibiting transfers of benefits that are lavish and extravagant aligns with current federal Indian policy.
Recommended Citation
Pippa Browde,
Tax Burdens and Tribal Sovereignty: The Prohibition on Lavish and Extravagant Benefits Under the Tribal General Welfare Exclusion,
20
Nev. L.J.
651
(2020).
Available at:
https://scholars.law.unlv.edu/nlj/vol20/iss2/8