Monday, September 28, 2009

IRS Considers Taxing Tribal Members' Health Care Benefits

Feather News

During an oversight hearing held by the U.S. Senate Committee on Indian Affairs in September, an Internal Revenue Service official pointed out that certain health care benefits provided to members of Indian tribes are taxable.

The IRS is scrutinizing the health care benefits provided by tribal governments to its members and could result in a tax to tribal members who are receiving those benefits.

"It is well-documented that we, as the federal government, are failing in meeting our obligation to provide health care to Native Americans," said Sen. Tom Udall. As a result, many tribal governments are providing medical benefits to supplement what is offered through the federal Indian Health Service. Should those benefits be taxed, then the government would be profiting "from not living up to its duty" to provide adequate health care to Indians, according to some.

The IRS contends that a law needs to be passed by Congress specifically excluding tribal health benefits from taxes. Others contend that the IRS can make the change as it has done by excluding from taxes aid given by the Department of Veterans Affairs and the Indian Health Service.

Note: Subsequent to this article being published we firmly believe that tribal members' health care benefits will not be taxed.