Compliance
Compliance Readiness: Postponed Filing Deadlines and Proposed Rule Changes for U.S. Companies
Recent IRS announcements extend deadlines for disaster-affected taxpayers and outline proposed rule changes for backup withholding under third-party payments—essential compliance updates.
By NomadicTax Research Team • 5-8 min read • March 23, 2026
## IRS Announces Postponements for Disaster-Affected Taxpayers
In **mid-March 2026**, the IRS published a relief order for those impacted by severe weather, flooding, landslides, and mudslides in **Washington State**. ([irs.gov](https://www.irs.gov/newsroom/irs-announces-tax-relief-for-taxpayers-impacted-by-severe-storms-straight-line-winds-flooding-landslides-and-mudslides-in-the-state-of-washington-various-deadlines-postponed-to-may-1-2026?utm_source=openai)) Taxpayers in designated disaster areas are granted until **May 1, 2026**, to file most tax returns (including individual, corporate, estate, and partnership returns) and perform other time-sensitive tax actions originally due before that date. This includes estimated tax payments falling due **on or after December 9, 2025**. ([irs.gov](https://www.irs.gov/newsroom/irs-announces-tax-relief-for-taxpayers-impacted-by-severe-storms-straight-line-winds-flooding-landslides-and-mudslides-in-the-state-of-washington-various-deadlines-postponed-to-may-1-2026?utm_source=openai))
### What Users Should Do
- If you live or operate a business in affected areas, mark **May 1, 2026**, as the extended deadline for relevant filings and payments. Penalties for late payments/filings will be waived when timely under this extension.
- Check whether your type of return or obligation qualifies as one being postponed—returns like certain information returns (W-2s, 1099s, etc.) or deposits are **excluded**. ([irs.gov](https://www.irs.gov/newsroom/irs-announces-tax-relief-for-taxpayers-impacted-by-severe-storms-straight-line-winds-flooding-landslides-and-mudslides-in-the-state-of-washington-various-deadlines-postponed-to-may-1-2026?utm_source=openai))
- Maintain accurate documentation of disaster damage or inaccessibility to meet eligibility for relief provisions.
## Proposed Regulatory Rule Changes: Backup Withholding in Third-Party Settlement Organizations (TPSOs)
Through **Internal Revenue Bulletin 2026-05**, the IRS proposed amendments to regulations under **Section 3406**, governing backup withholding on payments made via third-party settlement organizations. ([irs.gov](https://www.irs.gov/irb/2026-05_IRB?utm_source=openai)) Key elements include:
- Clarifying when TPSOs must perform backup withholding, particularly in network transactions.
- Accounting for de minimis thresholds under section 6050W(e), which currently provide exceptions for small payments. ([irs.gov](https://www.irs.gov/irb/2026-05_IRB?utm_source=openai))
- Determining how to “deem” the amount subject to withholding when payments are passed through intermediaries or networks.
### Compliance Actions for Businesses
- TPSOs and payment processors should assess internal control systems to detect which transactions might trigger backup withholding under revised definitions.
- Companies receiving settlement payments should track aggregated amounts to assess if they exceed thresholds; lower payments may now be subject where previously exempt.
- Stakeholders should draft and submit comments during the public notice period—note the deadline for REG-112829-25 was **March 10, 2026**. ([irs.gov](https://www.irs.gov/irb/2026-05_IRB?utm_source=openai))
## Why These Changes Matter
- **Disaster relief** helps impacted taxpayers avoid penalties and interest but requires verifying covered status.
- **Backup withholding rules**, if updated, might change tax liability and reporting burdens for businesses operating platforms, payment aggregators, or marketplaces.
- Miscalculating withholdable payments could lead to unexpected liabilities or penalties.
## Example Scenarios
- A SMB marketplace operating in Washington State should check whether filings postponed apply to its returns; employees and contractors in affected zones could gain extended deadlines.
- A platform facilitating peer-to-peer payments may have to revise their threshold triggers under backup withholding if certain de minimis payment exceptions are clarified or narrowed.
## Best Practices for Compliance
- Regularly monitor IRS bulletins and notices (especially IRBs) for proposed or finalized regulations.
- Document disaster impact and geographic exposure.
- Evaluate payment flows and thresholds proactively with tax advisors to avoid surprises.
- Use IRS tools and simulation models to check impact of proposed withholding adjustments.
By keeping track of these compliance developments—both temporary reliefs and proposed regulatory changes—businesses can stay ahead of deadlines, reduce risk, and plan accordingly.