Compliance
Compliance Essentials: Penalties Ameliorated Under OBBB and How to Stay Ahead
IRS is offering transitional relief for several new penalties under the One, Big, Beautiful Bill—learn what qualifies and how to protect yourself.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## What Penalties Need Relief Right Now?
Under the OBBB, several new reporting requirements—like those for tips, overtime, and car loan interest—come with penalties for noncompliance. However, the IRS has issued **transition relief** for many of these, easing the burden for 2025.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Sources of Relief and Key Notices
- **Form 1099-K threshold reversion**: The IRS clarified expectations in *Fact Sheet 2025-08*, easing immediate penalty risk.([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
- **Car loan interest reporting**: Notice 2025-57 offers **penalty relief** for reporting the interest paid on qualified vehicle loans during tax year 2025.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Employee Retention Credit (ERC) limits**: Guidance clarifies when claims filed late or denied will attract penalties or refunds. Fact Sheet 2025-07 addresses related compliance risks.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Who These Reliefs Target
- **Self-employed workers** reporting tips or overtime compensation.
- **Lenders or finance corporations** required to report car loan interest.
- **Businesses** responding to ERC audits or late claims.
## If You’re Subject, Here’s What to Do
- Keep **detailed records** for 2025 even if relief applies—you may lose relief in 2026.
- Consult notices and fact sheets: IRS publications like Notice 2025-57 and FS-2025-07 are essential.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Use software or engage professionals who are updating systems to comply with new OBBB rules now.
## Sample Situations & Outcomes
- **Taxi driver** who gets paid tips and makes group sales: Might have been at risk of 1099-K or tip deductions; now with relief, can catch up record keeping without immediate penalties.
- **Finance company** neglecting to report car loan interest: Thanks to transition relief, may avoid fines for missing initial reports under new requirements.
- **Small business** claiming ERC from Q3/Q4 2021 beyond deadline: Might face restrictions but also has clarity via FAQ on how late filings are treated.
## Broader Takeaways for Compliance
- Stay up to date on IRS bulletins and fact sheets—some reliefs expire.
- Build internal checks for new reporting items in 2025 (tips, overtime, interest)—don’t wait for penalties.
- Inform stakeholders—platforms, payroll, vendors—about new thresholds and reporting responsibilities.
## Final Words
Compliance today means knowing not just what the law says, but where the IRS is offering **leeway**. Use the transition relief wisely to set up compliant systems—for lawful reporting, minimal stress, and maximum financial control.