Aug. 18, 2020 — Uncertainty surrounding the future of COVID-19 and its economic impact continues to grow. As we approach the fall and winter months of 2020, many tribes have further examined and considered the most effective ways to mitigate threats posed by the pandemic to protect the general welfare of tribal community members.
One way in which tribes across Indian Country have supported community members is through the establishment of direct membership assistance programs which distribute federal relief funds, such as those provided by the CARES Act, to individual tribal members. These programs distribute funds on a one-time or reoccurring basis in the form of individual grants to ensure tribal members have greater access to supplies and financial resources during the pandemic. Eligible expenses under direct membership assistance programs are typically limited to payments for medical, housing, food, transportation, and related expenses that arise from the COVID-19 pandemic in order to comply with applicable federal laws, regulations, and guidance.
Importantly, under the Tribal General Welfare Exclusion Act and through additional guidance from the Internal Revenue Service (IRS), tribes can provide these funds directly to members on a non-taxable basis. For a tribe’s direct membership assistance program to qualify for non-taxable treatment, the tribe must carefully structure the program in accordance with applicable federal laws, regulation, and guidance. This favorable tax treatment directly benefits the tribe and its members because the tax exemption in effect gives the tribe additional resources to be allocated to adversely impacted tribal members.
If a tribe chooses to adopt a direct assistance program to address the impact of COVID-19, that program also can be developed to apply to other tribally declared emergencies that may arise such as: natural disasters, human-caused disasters, or any other event that strains the resources and welfare of the tribe’s membership. This flexibility allows tribes to implement a program to address a wide variety of emergencies on both a short-term and long-term basis.
The team of tribal advocates at Patterson Earnhart Real Bird & Wilson LLP have extensive experience developing direct membership assistance programs to ensure legal compliance with applicable federal and tribal laws and regulations. If you have questions, or would like assistance in implementing a direct membership assistance program to provide financial assistance to tribal members, please contact us for an initial consultation.
Patterson Earnhart Real Bird & Wilson have offices in Colorado and Washington, DC. To learn more, visit www.nativelawgroup.com.
Patterson Earnhart Real Bird & Wilson LLP is dedicated to the representation of American Indian tribes, tribal entities, and individual Indians across the United States. Our mission is to support and advance the sovereignty, self-sufficiency, and self-governance of our tribal clients. We take time to listen to, and fully understand, our clients’ concerns so we can develop responsive and appropriate solutions.