Overview
Congress, through the One, Big, Beautiful Bill, has introduced fresh compliance requirements beginning in 2026, including new excise taxes, penalty relief transitions, and tighter reporting duties. Understanding what must be done (now) can help avoid penalties and violate less compliance risk.
Major Compliance Changes to Know
1. Remittance Transfer Tax (Excise Tax)
- Section 4475 imposes a 1% excise tax on certain remittance transfers where the sender uses physical cash or similar instruments, effective January 1, 2026. (irs.gov)
- Notice 2025-55 gives penalty relief for remittance transfer providers for the first three calendar quarters of 2026 if they make timely deposits—even if the amounts are computed incorrectly—provided underpayment for the quarter is paid by the Form 720 due date. (irs.gov)
2. Phase-out of Paper Tax Refund Checks
Beginning September 30, 2025, the IRS will discontinue paper refund checks when feasible by law, requiring electronic payments where possible. (eitc.irs.gov)
3. Reporting Thresholds and New Information Return Changes
- Form 1099-K threshold: The dollar/transaction thresholds reverted to $20,000/200 under OBBB. Reportable for organizations/applicants receiving payments via third-party settlement organizations. (irs.gov)
- Employers are receiving guidance on penalty relief for new tip and overtime reporting requirements under OBBB for tax year 2025. (irs.gov)
Key Effective Dates to Track
| Requirement | Effective Date |
|---|---|
| Remittance transfer tax begins January 1, 2026 | 2026-01-01 (irs.gov) |
| Penalty relief for remittance providers through first three quarters of 2026 | applies to those Q1-Q3 2026 deposits (irs.gov) |
| Phase-out of paper refund checks | September 30, 2025 (eitc.irs.gov) |
| New reporting thresholds & 1099-K | Moneys and transactions after reinstatement under OBBB; effective for returns filed in 2025 for 2025 tax year (irs.gov) |
Practical Compliance Steps
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Businesses & remittance providers should build systems to track remittance types (cash, money order, cashier’s checks etc.), register accordingly, and ensure accurate remittance tax deposits beginning in 2026. Leverage Notice 2025-55 relief period to train staff and test procedures. (irs.gov)
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Tax preparers & employers should update payroll & reporting software to capture tip income correctly, overtime compensation, and new cash flow implications from 1099-K threshold reversions. Adjust internal review and documentation processes. (irs.gov)
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Individuals expecting refunds should ensure bank account information is correct with IRS and utilize direct deposit options, as paper checks will no longer be issued in many cases after September 2025. (eitc.irs.gov)
Risks of Non-Compliance
- Penalties for failing to deposit remittance transfer tax (unless relief conditions met). (irs.gov)
- Infractions of reporting thresholds may result in unfiled 1099-K or mismatched income reports. Could trigger audits or fines.
- Mismatched information returns may generate notices from IRS. Keeping all documentation and reconciling third-party statements is critical.
Conclusion
Compliance under the recent tax policy changes requires timely preparation. Businesses, remittance service providers, tax professionals, and individuals all have new obligations starting immediately or in early 2026. Implementing strong systems and staying informed will reduce exposure and keep you in good standing with the IRS.