To qualify for the first safe harbor under which the IRS will conclusively presume need, a tribal program must be structured to meet two requirements: (a) it complies with the rule's six criteria, including having written guidelines; and (b) it falls within one of the five broad program areas – housing, education, culture and religion, elder and disabled assistance, or other specified assistance programs. Tribal program benefits meeting these requirements will be conclusively presumed to meet the GWE need requirement and be deemed nontaxable. This safe harbor rule offers tribes and recipients of tribal program benefits an added degree of certainty in tax administration. Importantly it does not limit tribes from providing other general welfare program benefits which would also be nontaxable if those programs are administered according to the longstanding GWE rule: (1) made pursuant to a governmental program; (2) for the promotion of the general welfare (based on individual, family, or community need); and (3) not compensation for services.

Flexibility is a key feature of the new Revenue Procedure. The final version of the guidance modifies and broadens the scope of the program activities eligible for the safe harbor GWE treatment compared to the IRS GWE draft rule issued in 2012. It is now established that GWE treatment under those listed program activities are “illustrative only rather than an exhaustive list.” Additionally, the revised list of specific GWE eligible benefits repeatedly uses the term "including but not limited to" which requires IRS deference to tribal government determinations as to how they choose to administer their general welfare program benefits.

The second safe harbor applies to “payments” by tribes to cultural or spiritual leaders in honor of their participation in cultural, religious, or ceremonial events. The second safe harbor will conclusively conclude that such payments, when not lavish or extravagant under the facts and circumstances, provide for a tribal community need and not as taxable compensation.