Interim Guidance Issued on the Direct Pay of Tribal Lease Funds (Including HEARTH Act Leases)

On June 8, 2017, the IRS office of Indian Tribal Governments issued Interim Guidance on the Direct Pay of Tribal Lease Funds (including HEARTH Act leases). It directs IRS employees to apply the standards outlined in Notice 2015-67 when determining whether the per capita distributions of direct pay lease funds (including HEARTH Act leases) are subject to reporting or withholding.

The IRS will not seek information reporting on per capita distributions of direct pay tribal lease funds (including HEARTH Act leases) that, had they been paid from the trust, satisfy the general rule under Notice 2015-67. The IRS will apply the Notice 2015-67 examples of mischaracterized distributions to all per capita distributions, including those from direct pay leases.