January 11, 2021 

SENT VIA EMAIL: Tribal.Consult@treasury.gov 

Treasury Tribal Advisory Committee 

Department ofthe Treasury 

1500 Pennsylvania Avenue NW, Room 1426G 

Washington, D. C. 20220 

Re: Comments regarding general welfare guidance under Code Section 139E 

Dear TTAC GWE Subcommittee: 

The Redding Rancheria ("Tribe") would like to offer three specific provisions for inclusion 

in guidance under the Tribal General Welfare Exclusion Act (the "Act" or "GWE"): 

First, the Tribe would like to suggest guidance that will expressly confirm deference to 

tribal governments under the Act's statutory construction rule. We understand that IRS will be 

tasked with interpreting Code Section 139E compliance. However, the Tribal General Welfare 

Exclusion Act, Section 2(c), provides that ambiguities in Code Section 1_39E _"s9-all be.re~olved in 

favor of Indian tribal governments· and deference -shall be given to Indian triba( gqv.eniments for 

the· programs· administered and authorized by the tribe to benefit the generai welfare . of the tribai 

community." Because this appears in the Act and not in Code Section 139E itself, we think it is 

important to provide some practical guidance for IRS in implementing this key component of the 

General Welfare Exclusion Act. As the Act clearly vests discretion with tribal governments in 

interpreting Code Section 139E, we suggest that the final rule expressly confirm that Tribal 

decisions under Code Section 139E cannot be challenged or overturned except upon the showing 

of an abuse of discretion. This is consistent with the standards that apply to f~~~ral agencies when 

they are vested with discretion in interpreting-a·statute. Our specific suggestiort f9r ·guidance in this· 

regard is as follows: · · _. '· · - · · ' ' . ! . ,l : ,• 

Proposed Rule: 

Rule ofConstruction: 

2000 RebbittS Rattcl1eria Rt,. Ret,bitt5. CA 96001 Tribal Office: ;w-22;-8979 Fax: 530-241-1879 
Treasury Tribal Advisory Committee 

January 11, 2021 

Page2 

(a) General Rule. Ambiguity under Code Section 139E shall be 

resolved in favor ofIndian tribal governments and deference shall be given 

to Indian tribal governments for the programs administered and authorized 

by the tribe to benefit the general welfare of the tribal community. When 

implementing the foregoing rule of statutory construction, IRS shall take 

into account that Indian tribal governments are vested with the sovereign 

right and discretion to determine the types and amount of general welfare 

benefits best suited to promote the general welfare needs of each Tribe, as 

well as the means to implement and substantiate the use of such assistance. 

(b) Standard ofReview; Presumptions and Burden ofProof An Indian 

tribal government will be presumed to have properly exercised its discretion 

under Code Section 139E ifit can demonstrate that it has acted consistently 

with either written general welfare program guidelines or unwritten tribal 

custom or government practices (per Code Section 139E(c)(4)). Matters 

within the sovereign discretion of tribal governments under Code Section 

139E shall not be challenged or overturned except upon the showing of an 

abuse of discretion. In audit, the Internal Revenue Service shall have the 

burden ofproving an abuse of discretion by reference to the Tribe's written 

program guidelines ( or unwritten tribal custom or government practices), as 

applicable, and the unique goals and statutory construction requirements of 

the Tribal General Welfare Exclusion Act. 

Second, the Tribe would like to suggest guidance that will relieve tribes from the burden of 

collecting individual receipts. While we understand that tribes will be asked by IRS to demonstrate 

that program funds were used for eligible GWE purposes, securing receipts to prove that GWE 

assistance is used for an eligible program expense can present an administrative burden as well as 

cultural or traditional barriers to members otherwise seeking certain assistance. Many types of 

assistance also do not involve expenses that would give rise to a receipt. And the cost oftracking 

individual receipts can be unduly burdensome. Moreover, tribes can design their programs in a 

manner that promotes compliance without the need for collecting individual receipts. Our 

suggestion for guidance in this regard is as follows: 

Proposed Rule: 

An Indian tribal government shall not be required to collect receipts as a 

condition for favorable treatment of a tribal government program or Indian 

general welfare benefits under Internal Revenue Code Section 139E. Other 

measures reasonably designed to ensure that program funds are used to 
Treasury Tribal Advisory Committee 

January 11, 2021 

Page 3 

further eligible program purposes may be implemented to satisfy Code 

Section 139E including, but not limited to: 

(1) Certification from recipients that program funds will be or were 

used for eligible program purposes; 

(2) Use of direct vendor pay arrangements; 

(3) Limiting benefits to amounts pre-determined by the Tribe as 

reasonably necessary to meet eligible GWE expenses. A Tribe's 

determination of amounts reasonably necessary to meet eligible 

GWE expenses will be presumed to satisfy this requirement if: 

(i) The Tribe bases program benefits on member expense data 

corroborated by the Tribe through member surveys or other 

means designed to document the amount of eligible GWE 

expenses; 

(ii) The Tribe bases program benefits on limits implemented by 

state or federal programs; 

(iii) The Tribe bases program benefits upon objective state or 

federal government expense data such as but not limited to 

national and local living expense standards published by IRS 

for housing and utilities, transportation, and food, 

housekeeping supplies, apparel and personal care products. 

Third, the Tribe would like to suggest guidance that will ensure prospective enforcement 

and an adequate time for tribes to make changes to their GWE programs in order to meet any new 

requirements set forth in the final rule. Our suggestion for guidance in this regard is as follows: 

Proposed Rule: 

Indian tribal government programs shall be deemed to comply with Code 

Section 139E prior to the effective date of the final rule so long as the tribe 

has designed and administered its program consistent with a good faith 

interpretation of Code Section 139E. 

Enforcement based on the final rule shall be prospective only. 
Treasury Tribal Advisory Committee 

January 11, 2021 

Page4 

The effective date ofthe final rule shall be a date which is no earlier than the 

first calendar year following 12 months after the final rule is published in 

the Federal Register. During the transition period between publication of 

the final rule and the effective date, tribes may continue administering their 

programs consistent with their pre-publication good faith interpretation of 

Code Section 139E. 

We thank you for considering the Tribe's comments on this important topic. 

Sincerely, 

Tracy 

~~ Edwards 

CEO