Compliance
Compliance Alert: US IRS One, Big, Beautiful Bill & New Reporting Thresholds for Tax Year 2026
Recent IRS announcements under the One, Big, Beautiful Bill (OBBB) introduce major compliance changes, including new Form 1099-K thresholds and inflation adjustments affecting a wide range of U.S. taxpayers.
By NomadicTax Research Team • 5-8 min read • November 14, 2025
## What Is the One, Big, Beautiful Bill (OBBB)?
Passed recently by Congress, the OBBB includes sweeping tax policy changes across reporting rules, excise taxes, and more. For the 2026 tax year and beyond, multiple new compliance measures are effective. The IRS has issued guidance via notices and fact sheets. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Major Reporting & Threshold Changes
- **Form 1099-K Threshold Reversion**: The reporting threshold reverts from a lower level back to **$20,000**, affecting transactions via third-party networks. Individuals or businesses receiving payments above that will need to file 1099-K forms. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Inflation Adjustments for 2026**: IRS released annual inflation adjustments for over 60 tax provisions—including tax brackets, standard deductions and many credits. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Other Compliance Developments
- **Penalties & Relief for Early Car Loan Interest Reporting**: Guidance (Notice 2025-57) provides penalty relief for lenders handling new reporting requirements under OBBB for car loan interest in 2025. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Employee Retention Credit (ERC) Limitations**: FAQs clarify limitations on credits/refunds for Q3 and Q4 of 2021 filed after Jan 31, 2024. Ensures compliance with offering credits only within permitted timelines. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Who Is Affected Most
- **Gig economy workers and sellers** using platforms like PayPal, Etsy, etc.—who receive $20,000+ in payments—need to watch for 1099-K reporting.
- **Financial institutions and lenders** handling car loans—new filing & reporting obligations for interest.
- **Tax professionals**—must stay current with bracket changes and deduction amounts for 2026, to ensure correct withholding and return preparation.
## Actionable Insights for Compliance
1. Review your transactions with third-party networks in 2025 and anticipate whether you’ll cross the $20,000 threshold. Document everything carefully.
2. Lenders should audit systems to accommodate the new reporting requirement, using Notice 2025-57 to minimize penalties.
3. For return preparations, update tax software or advisor practices with 2026 inflation adjustments as soon as they’re published to avoid errors.
4. If claiming Employee Retention Credits from 2021, ensure your eligibility matches OBBB’s revised timelines and limitations. Seek IRS FAQs.
## Final Takeaway
US tax policy is shifting fast under OBBB. Reporting thresholds, stricter timelines, broader compliance expectations mean that individuals and entities must take proactive steps—especially gig workers, lenders, and investors—to stay ahead.