November 18, 2019 

SENT VIA EMAIL: Tribal.Consult@treasury.gov 

Treasury Tribal Advisory Committee 

Department of the Treasury 

1500 Pennsylvania Avenue NW, Room 1426G 

Washington, D. C. 20220 

Re: Public Comment in advance of December 3, 2019 TTAC meeting 

Redding Rancheria 

Dear Committee: 

The Redding Rancheria of California (the "Tribe") appreciates the opportunity to present 

comments to the Treasury/ Tribal Advisory Committee (the "TT AC" or "Committee") in 

connection with its consideration of Tribal Taxation and General Welfare Exclusion ("GWE") 

guidance under Internal Revenue Code (the "Code") Section 139E. We understand that the 

guidance process has just begun, and the Tribe is planning to provide more comprehensive 

comments as specific guidance proposals are considered. In the interim, we want to highlight a 

few key areas for consideration: 

Employment Tax / 941 Examinations: 

Many tribes throughout the country have experienced "941" and "945" examinations 

where IRS field agents review whether payments to individuals should be reported on Form 1099 

or Form W2. IRS routinely recommends that tribal boards and committees should be classified as 

"employees" and reported on Form W2, even when paid nothing more than modest and infrequent 

meeting stipends or honorariums. The Tribe respectfully requests that the TTAC consider 

guidance and IRS field agent training on applying the "common law" test for determining 

employment and independent contractor status for tribal boards and committees. 

The Tribe also requests TTAC to consider guidance for purposes of training IRS field 

agents with regard to when tribes should be entitled to "Section 530" relief in the context of these 

employment tax examinations. We understand that field agents have denied relief, in part, based 

on the assertion that tribes cannot prove a "long standing industry practice" in reporting tribal 

board or committee stipends on Form 1099. However, we understand that many tribes across the 

country in fact have historically reported board and committee stipends or honorariums on Form 

1099. Our understanding is that many tribes have changed these practices in recent years based on 

Tribal Office: 5'30 -225-8979 Fax: 530 -241- 1879 
REDDING RANCHERIA 

Treasury Tribal Advisory Committee 

November 18, 2019 

Page2 

field agent advice and/or to resolve individual field agent findings. It would be helpful if the 

TTAC could confirm with ITG (who has this historic info1mation) that such practices have in fact 

been long standing, and that tribes should be entitled to rely on those historic practices in securing 

Section 530 relief. If ITG cannot provide that confomation, perhaps TTAC can consider 

coordinating a survey of tribal practices that tribes could then look to when audited in order to 

support Section 530 relief. 

GWE Lavish and Extravagant (benefits accrued over time): 

In determining the value of benefits for purposes of the lavish or extravagant limitation 

under Code Section 139E, the Tribe would request that the Committee take into account benefits 

that accrue over time. For example, a tribe may provide housing assistance benefits by budgeting 

a modest amount each year for eligible members who continue to meet program guidelines over 

time. A member who continues to meet program guidelines, perhaps over the next twenty years, 

may eventually qualify for significant down payment assistance equal to the amount of assistance 

that has accrued over that period of time. In valuing the benefit to determine whether it is lavish 

or extravagant, the Tribe would request that IRS take into account the annual benefit amounts 

accrued each year, rather than just the final year payment. 

The Tribe will provide additional comments as the Committee considers specific G WE 

guidance, such as options to substantiate program compliance. We look forward to working with 

the TT AC on these matters. 

Sincerely, 

R,d~~~~