May 22, 2024

Long-Awaited General Welfare Exclusion Guidance Coming this Summer

Holland & Knight Native American Law Blog
Kenneth W. Parsons
Native American Law Blog

At the 14th periodic meeting of the Treasury Tribal Advisory Committee (TTAC) on May 15, 2024, representatives from the U.S. Department of the Treasury and IRS announced that they anticipate publishing guidance on the Tribal General Welfare Exclusion Act of 2014 (Act) this summer, nearly 10 years after the Act became law.

The guidance will be in the form of proposed regulations. Tribes will have consultation and comment opportunities on the proposed regulations before they become final. Although it remains to be seen what will be included in the proposed regulations, the Treasury Department and IRS emphasized at the TTAC meeting that they do not intend to substitute the judgment of the federal government for that of Tribal governments. Deferring to Tribal governments and providing them the flexibility to design and administer their own General Welfare Exclusion programs were key themes in a report issued in 2022 by the TTAC's Subcommittee on the General Welfare Exclusion.

The Act imposed a moratorium on IRS audits of General Welfare Exclusion issues. The moratorium does not end once the Treasury Department and IRS issue guidance on the General Welfare Exclusion. Prior to resuming audits, the Treasury Department – in consultation with TTAC – must also provide training and education on the new guidance to IRS field agents and Tribal finance officers.

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