Compliance
Compliance Essentials for US Businesses: 1099-K, PTIN, and Excise Tax Updates in Late 2025
Recent IRS announcements require businesses and tax professionals to update practices around Form 1099-K reporting, tax preparer identification, and excise tax remittance — here’s what to do now to stay compliant.
By NomadicTax Research Team • 5-8 min read • November 13, 2025
## Key Compliance Updates from the IRS
The IRS issued several important updates in October 2025. Notably:
- Fact Sheet 2025-08 clarifies that the dollar threshold for **Form 1099-K reporting** reverts to **$20,000** under the OBBB Act. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- PTIN (Preparer Tax Identification Number) renewals are now open for tax professionals for the **2026 season**. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Notice 2025-55 grants **penalty relief** for remittance transfer providers failing to deposit excise tax under section 4475 for the first three quarters of 2026, provided reasonable cause. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## What Business Owners and Tax Preparers Must Do
| Area | Change | Action Steps |
|------|--------|---------------|
| 1099-K Reporting | Threshold returns to $20,000 under OBBB | Review your transaction volumes. If you received/process payments that surpassed $20,000 aggregate even once in prior lower thresholds, prepare to report. |
| PTIN Renewal | Prep period open for 2026 return season | If you prepare returns for hire or compensation, renew your PTIN ahead of peak season to avoid delays. |
| Excise Tax - Remittance Providers | Penalty relief available in certain cases | Ensure documentation to meet “reasonable cause” standard. Update deposit practices; engage a tax counsel if unsure about qualifying. |
## Example Scenarios
- A merchant platform previously monitoring $600 as 200+ transactions under former 1099-K proposals: now must watch for aggregate amounts over $20,000. If platform‐fees, refunds or adjustments push totals beyond $20,000, reporting applies.
- A preparer whose PTIN expired or lapses can’t legally prepare returns. Early renewal ensures continuity.
- Remittance transfer providers anticipating excise tax obligations in 2026 should analyze whether they meet deposit thresholds and plan to document any failure with reasonable cause.
## Avoiding Common Compliance Pitfalls
- Keep detailed records of **electronic payments**, even non-cash tips, because “qualified tips” definition is being clarified under OBBB in proposed regulations. ([irs.gov](https://www.irs.gov/irb/2025-42_IRB?utm_source=openai))
- Don't rely on verbal promises or unwritten policies for PTIN renewal or excise tax deposit obligations. Written procedures help during IRS audits.
By staying ahead of these changes, businesses can avoid costly penalties, manage cash flow effectively, and ensure their operations align with new federal thresholds and requirements.