Azure: Tags enforced by Azure Policy interfere Terraform deployment

Wondering if there is any guidance how to handle tagging with Terraform VS tagging enforced via Azure Policy? I’m running into issues when Azure Policy sets some tags on resources that are being created by Terraform, this is causing random errors in terraform apply. I don’t have any issues when I disable the policy. I already tried ignore_changes, but deployment problems didn’t stop.

  lifecycle {
    ignore_changes = [
      # Ignore changes to tags, e.g. because a management agent
      # updates these based on some ruleset managed elsewhere.