IRS has recently issued Interim Guidance on the income tax treatment of per capita distributions to tribal members on certain direct pay leases. The interim guidance directs IRS employees to apply the standards set forth in Notice 2015-67 when determining whether the per capita distributions of direct pay lease funds are subject to reporting or withholding.
IRS will not seek information reporting on per capita distributions of direct pay lease funds that, had they been paid from the trust, satisfy the general rule under Notice 2015-67. IRS will apply the Notice 2015-67 examples of mischaracterized distributions to all per capita distributions, including those from direct pay leases.
Courtesy of IRS
For more information contact Neikirk, Mahoney and Smith at 502-896-2999
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