Announced on June 14th, the comment period for the Department of the Treasury/IRS public comment requests for Elect/Direct Pay closes today Monday, August 14th, with Consultation Requests from the Department of the Treasury due August 18th at 11:59 pm Alaska Time.
Following the closure of the comment period, a public hearing on proposed regulations is scheduled for August 21st at 10AM Eastern Time. Requests to attend the hearing must be received by 5PM Eastern Time, August 17th and requests to speak and outlines of topics to be discussed must be received by August 14th.
As requested in the June 14th Dear Tribal Leader letter, the Department of the Treasury asked for assistance on the assistance of Tribal leaders in addressing the following questions:
A. What questions and/or comments do Tribal governments have with regard to eligibility under §1.6417-1(c)(7), which treats any agency or instrumentality of any Indian tribal government or political subdivision thereof as an applicable entity? Treasury and the IRS further request comments on whether the proposed definitions encompass the entity structures that Indian tribal governments employ in activities that would give rise to applicable credits for which elective payment elections may be made, including activities of entities with partial Indian tribal government ownership.
B. What questions and/or comments do Tribal governments have with regard to the temporary regulations for the pre-filing registration process under §1.6417-5T, including the electronic filing requirements?
C. What other questions or comments, if any, do Tribal governments have regarding any of the remaining regulations in the NPRM?
Tax Status of Tribally Chartered Corporations
Also coming up this Friday is the closing period for consultation on the tax status of Tribally chartered corporations. Per their May 15th Dear Tribal Leader letter, the Department of the Treasury has asked for assistance on a number of questions related to Tribally Chartered entities:
1. What role do Tribally chartered corporations (wholly, majority, or jointly owned) perform for Tribal governments and Tribal economies?
(a) In what ways are Tribally chartered corporations different than a non-Tribal government owned business?
(b) Do Tribes consider Tribal corporations to be arms of the Tribal government and/or political subdivisions or instrumentalities. If so, please explain the factors that inform this determination.
2. Existing IRS Regulations and Revenue Rulings provide that Federally chartered corporations under the Indian Reorganization Act of 1934 (IRA) and Oklahoma Indian Welfare Act (OIWA) are not subject to Federal income tax.
(a) What challenges do Tribes encounter in chartering such corporations?
(b) What limitations do Tribes see in these structures that result in chartering under the alternative categories listed in question 3.
3. Tribal governments may charter a business under Federal, State, or Tribal law and subject to such laws Tribes may consider a variety of structures, including but not limited to wholly owned, majority owned, and jointly owned corporations.
(a) What advantages and disadvantages exist for the following business structures for Tribal governments
(1) Corporations chartered under Tribal law (tribally chartered corporations);
(2) Corporations chartered under the law of a State;
(3) Limited liability companies organized under Tribal law or State law; and
(4) Partnerships organized or operating under Tribal law or State law (for example, joint venture partnerships).
(b) What factors shape a Tribes decision to charter a corporation as a wholly owned, majority owned, or jointly owned corporation?
(c) How important to the success of a Tribal business enterprise is stock investment from investors other than the Tribal government (as opposed to, for example, debt financing).
For the rest of questions Treasury has requested assistance on, please see the “Dear Tribal Leader” letter below.
