What’s in the One, Big, Beautiful Bill (OBBB)
Over 2025-2026, the U.S. government passed sweeping changes under the OBBB that affect many taxpayers globally, particularly for remittances, foreign income, and excise taxes. Two policies stand out:
- Remittance Transfer Tax: Starting January 1, 2026, a 1% excise tax applies when cash-like instruments are used to send remittances abroad. Remittance providers may have to collect and remit tax. (irs.gov)
- Excise Tax on Dyed Fuel & Environmental Taxes: New rules allow recovery of certain excise taxes and introduce requirements under the remittance tax and other issuer obligations. (irs.gov)
Planning for Cross-Border Transactions & Remittances
| Scenario | Potential Liability | Strategies to Reduce Cost |
|---|---|---|
| Individuals sending remittances via cash or cashier’s check | May incur 1% remittance transfer tax and possible collection and reporting burdens | Use wire transfers or fees by banks; choose instruments that are not defined as “physical” instruments under OBBB. Work with remittance providers early. |
| Businesses or NGOs receiving or transmitting large remittances | Providers may be fined unless they collect tax; quarterly excise reporting needed | Build compliance process: ensure provider delivers required information; maintain records to avoid liability. |
Use of Excise and Fuel-Related Relief
The OBBB also expands excise tax relief options:
- If you purchase dyed fuel or are involved with emissions-taxable fuel, you might qualify for temporary regulations or notice relief. (irs.gov)
- Farmers and fishermen can have waivers on underpayment penalties of estimated tax, particularly when paying full tax due by April 15. (irs.gov)
Actionable Insights
- Audit your payment channels: Identify how your remittance or transaction instruments are defined. This can determine who bears the tax (sender vs. provider).
- Review internal control systems: Tracking excise tax deposits, remittance amounts, and due dates (semimonthly/quarterly) is crucial.
- Stay ahead of proposed regulations: Public comments often affect outcomes (e.g. Treasury/IRS requested comments by June 12, 2026 for remittance tax rules). Participate if applicable. (irs.gov)
- Seek relief in disaster zones: If you're operating or living in areas hit by natural disasters, deadline extensions and penalty abatements may be available. (irs.gov)