On June 30, 2025, the United States Department of the Treasury announced that it will be holding an online tribal consultation with Alaska Native Corporations on July 29, 2025, from 1:30 pm to 4:30 pm ET, to discuss the Tribal General Welfare Exclusion Act of 2014.

Interested parties can register for it here.

The Tribal General Welfare Exclusion Act of 2014 enacted section 139E of the Internal Revenue Code. Section 139E excludes from the gross income of a taxpayer the value of any Indian general welfare benefit provided to or on behalf of a member of an Indian Tribe (or any spouse or dependent of such member) pursuant to an Indian Tribal government program if all the following requirements are satisfied:

• The program is administered under specified guidelines and does not discriminate in favor of members of the governing body of the Tribe; and
• The benefits provided under the program are:
  • available to any Tribal member who meets the guidelines;
  • for the promotion of general welfare;
  • not lavish and extravagant; and
  • not compensation for services.

Notably, the definition of Indian Tribal government in Section 139E includes Alaska Native Corporations, such that general welfare benefits provided by Alaska Native Corporations should be excluded from a taxpayer’s gross income.

The Internal Revenue Service (IRS), however, has not promulgated regulations implementing Section 139E, particularly with regard to Alaska Native Corporations. In fact, on September 16, the IRS issued a notice of proposed rulemaking regarding potential amendments to policies that govern which benefits provided by Indian Tribal government programs qualify as tribal general welfare benefits, and therefore are subject to potential exclusion from recipients’ gross income for tax purposes, but specifically stated in that notice that its proposed rules would only apply to federally recognized tribes and that it would address Alaska Native Corporations separately. The IRS stated in its September 2024 notice of proposed rules that it intends to hold further tribal consultations before issuing guidance on ‎whether Alaska Native Corporations will be regarded as qualifying entities under the definitions of Tribal Government ‎and Indian Tribe.

As such, the July 29^th tribal consultation marks the implementation of that commitment by the IRS to consult with Alaska Native Corporations prior to proposing rules that would govern application of Section 139E to Alaska Native Corporations. Specifically, the IRS states in its notice of the tribal consultation with Alaska Native Corporations that:

The purpose of this consultation is to provide ANCs with an opportunity to inform the development of guidance that would impact them. The text of the NPRM defines the sub-reference to Indian Tribal government in the broader section 139E(c)(1) category of Indian Tribal government. That definition, however, does not otherwise change the recognition that ANCs are included in the broad section 139E(c)(1) category of Indian Tribal government based on the plain language of the Act. Lastly, the preamble to the NPRM notes that the Treasury Tribal Advisory Committee has not provided recommendations related to ANCs and the Act.

The notice of a tribal consultation includes a lengthy list of questions and issues that the IRS is seeking input on. The questions are focused on the types of benefits being provided by ANCs to their shareholders, how eligibility for the benefits is determined (including asking for input on how to define a “tribal member” for purposes of applying Section 139E to Alaska Native Corporations), and how to define what constitutes a program that is “for the promotion of general welfare.”‎

The complete list of questions in the tribal consultation notice is below.

1. Please describe the programs established by your ANC that provide benefits that are intended to be excluded under section 139E of the Code, including:

• Whether these programs are administered solely by your ANC or whether they are administered in part or in whole by other entities (for example, subsidiaries, other ANCs, Tribes, consortia, or other organizations).
• How benefit amounts provided under these programs are determined and paid for.
• How benefits provided by these programs are accounted for by your ANC for federal income tax purposes, including, for example, whether your ANC treats these payments as a reduction to its current earnings and profits.
• Whether your ANC treats any of these payments as giving rise to deductions that reduce the taxable income of the ANC or an affiliate, and if so, which kind of payments are so treated.

2. Do your ANC’s general welfare programs provide benefits solely to your shareholders, their spouses, and/or their dependents?

• If not, who are the other beneficiaries of your ANC’s general welfare programs?
• Does your ANC establish and administer a general welfare program that provides benefits in equal amounts to all shareholders (or all shareholders of a particular class)?
  • If so, how is this program distinct from a corporate dividend payment?

3. How should “member of an Indian Tribe” as used in section 139E(b) and “Tribal member” in section 139E(b)(2)(A) be defined for a program established and administered by an ANC under section 139E?

• If ANC shareholders are included in the definition of a “member of an Indian Tribe” or “Tribal member,” how should a shareholder be defined?
• Are there examples in other federal guidance where an ANC shareholder has been defined as a Tribal member?
• The NPRM defines a category of “Tribal Program Participants” who are eligible to receive a Tribal general welfare benefit. Please explain whether a similar rule is needed for programs established and maintained by an ANC.
• How should “spouse” as used in section 139E(b) be defined for a program established and administered by an ANC under section 139E?

4. Please identify the criteria the regulations should adopt to determine whether benefits provided under a program established and maintained by an ANC are “for the promotion of general welfare.”

• Please provide examples of benefits or programs that satisfy these criteria.
• Please describe the relationship between these criteria and the criteria currently used by the ANC for determining whether a program complies with 43 U.S.C. 1606(r) (confirming the right of Alaska Native corporations to provide benefits to shareholders or shareholders’ immediate family members).
• Please describe the extent to which, if any, these criteria apply to distributions required by 43 U.S.C. 1606(j).
• What relationship, if any, do ANC general welfare programs have to settlement trusts as defined in 43 U.S.C. 1602(t)?

5. Would safe harbors be helpful for purposes of determining whether an ANC has established and administered a program in accordance with section 139E of the Code?

• If so, what types of safe harbors would be most useful?

6. What criteria should Treasury and the IRS consider in adopting regulations applicable to ANCs to determine what constitutes “lavish or extravagant” with respect to Indian general welfare benefits provided by an ANC under section 139E of the Code?

• Please provide examples of benefits that are lavish or extravagant and examples of benefits that are not lavish or extravagant.

7. What criteria should Treasury and the IRS consider in adopting regulations applicable to ANCs to determine what constitutes “items of cultural significance, reimbursement of costs, or cash honoraria in connection with cultural or ceremonial activities” described in section 139E(c)(5) of the Code? In addition, please also:

• Identify the needs of the ANC or its members that your cultural or ceremonial activities address.
• Provide examples of cultural or ceremonial activities that your ANC provides or sponsors.
• Provide examples of items with cultural significance that are provided in connection with participation in cultural or ceremonial activities for the transmission of Tribal culture.

8. Please provide suggested examples or rules for applying the requirement in section 139(b)(1) of the Code that the program “not discriminate in favor of members of the governing body of the Tribe” to an ANC.

9. Section 139E(c)(4) of the Code provides that a program will not fail to be treated as an Indian Tribal government program solely by reason of the program being established by Tribal custom or government practice. What criteria should be adopted for section 139E(c)(4) regarding the establishment of Tribal custom or government practice related to ANC programs?

10. Please provide suggested examples or rules for applying the term “agencies or instrumentalities of an Indian Tribal government,” found in section 139E(c)(1) of the Code, to an ANC.

11. Please provide examples of payments to vendors or service providers that should be excluded from income under section 139E(c)(5) of the Code and payments that should not be excluded from income under that section?

12. If similar or different rules are sought compared to those in the NPRM, please provide information explaining the need for those rules and how they should be similar or different.

13. If Treasury provides that ANCs may rely on the Final Rule applicable to Indian Tribal Governments until the issuance of ANC guidance, what questions or concerns do you have?

14. To the extent not discussed above, please discuss any outstanding issues, concerns, or other topics related to section 139E of the Code that may require guidance.

This article summarizes aspects of the law. This article does not constitute legal advice. For legal advice for your situation, you should contact an attorney.