New guidance: Tribal general welfare exclusion
The U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) have issued a Notice of Proposed Rulemaking (NPRM) PDF to implement section 139E of the Internal Revenue Code, created by the Tribal General Welfare Exclusion Act of 2014 (Act). Additionally, Treasury held Tribal consultations on the proposed rule on Nov. 18, 19, and 20, 2024, at 1 p.m. Eastern time.
Treasury accepted written comments received by Jan. 3, 2025, 11:59 p.m. Alaska Time. Written comments were submitted to tribal.consult@treasury.gov
Treasury and IRS issue proposed regulations providing clarity regarding the federal tax classification of entities entirely owned by Tribal governments
The Department of the Treasury and the Internal Revenue Service issued proposed regulations addressing the federal tax classification of corporations or LLCs that are owned entirely by Indian Tribal governments (Tribes) and formed under the laws of the Tribes that own them.
Under the proposed regulations, Tribal law entities that are entirely owned by Tribes would not be recognized as separate entities for federal tax purposes and would not be subject to federal income tax.
The proposed regulations would also clarify that Tribal law entities entirely owned by Tribes may receive the value of certain energy credits under the Inflation Reduction Act.
Until the final regulations are published in the Federal Register, Tribes and related entities may generally rely on these proposed regulations.
Treasury and IRS encourage interested parties to submit comments on this guidance through Regulations.gov. Please indicate IRS and REG-113628-21 in the submission.
Treasury accepted written comments received by Jan. 21, 2025, 11:59 p.m. Alaska Time.
Additionally, Treasury held Tribal consultations on the proposed rule on Dec. 16, 17, and 18, 2024, at 1 p.m. Eastern time.
Find tax information for Native American tribal governments and members, including tax law, filing and reporting requirements, employment tax and more. Find how we can help you in the IRS Office of Indian Tribal Governments.
Recent developments – Clean energy credits
Clean energy tax credit benefits available
Government and tax-exempt entities can now benefit from clean energy tax credits with new options enabled by the Inflation Reduction Act of 2022. Find out about elective pay and transferability of clean energy tax credits.
For more information on available credits for elective pay, refer to IRS Publication 5817-G, Clean Energy Tax Incentives: Elective Pay Eligible Tax Credits PDF.
Form 990-T for Elective Payment Election Only Presentation - new instructional video
This video explains how applicable entities, including certain Indian tribal governments, that only need to file Form 990-T to make an elective payment election, complete Form 990-T and related returns.
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The ITG office provides customers quality service by helping them understand and comply with applicable tax laws and protecting the public interest by applying the tax law. Our goal is to meet the needs of both the Indian tribal governments and the federal government, and to simplify the tax administration process.
Tribal government specialists work in locations near the seats of tribal governments. Our specialists can address issues that relate to tribal governments as employers, distributions to tribal members, and the establishment of governmental programs, trusts and businesses.
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Contact the IRS Office of Indian Tribal Governments if you need further clarification.