Compliance
Staying Compliant: Changes to IRS Reporting and Relief Under the OBBB Act
Recent IRS notices introduce new reporting requirements and transitional relief—use these to avoid penalties and stay ahead of compliance obligations.
By NomadicTax Research Team • 5 min read • November 20, 2025
## Introduction
In late 2025, several IRS announcements stemming from the One, Big, Beautiful Bill (OBBB) Act introduce both new reporting rules and relief—especially related to employee retention credits, car loan interest, remittance transfers, and the Corporate Alternative Minimum Tax. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Key Compliance Changes
- **Reverted 1099-K Threshold:** The IRS reinstated the requirement for Form 1099-K reporting when payments exceed **$20,000** or more than 200 transactions under the One, Big, Beautiful Bill. This impacts gig workers, marketplaces, and online sellers. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Employee Retention Credit (ERC) Claims Compliance:** The IRS issued FAQs clarifying limitations for ERC claims under OBBB, especially for claims filed late (after Jan 31, 2024) or without satisfying new rules. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Transitional Guidance on Car Loan Interest Reporting:** New rules require lenders to report car loan interest. The IRS is offering transition relief for 2025 for lenders, including penalty relief under Notice 2025-57. Failure to report can lead to penalties, so this is a key area for lenders. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Deposit Penalty Relief for Remittance Transfer Providers:** Under Notice 2025-55, providers of remittance transfers will receive relief for failure to deposit excise taxes during the first three quarters of 2026, if reasonable cause is shown. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Practical Advice for Compliance
- **Review Reporting Thresholds:** Platforms and payment processors must assess whether their businesses meet or exceed thresholds for 1099-K reporting. Stay ahead of transaction counts.
- **Document and Seek Relief Early:** In cases of non-compliance, especially for new rules, gathering evidence for reasonable cause (e.g., under the remittance transfer or car loan interest rules) may avoid or mitigate penalties.
- **Update Systems and Contracts:** Lenders, employers, and payors should ensure their systems can report required interest or compensation—especially if new definitions or data‐capture requirements are involved.
- **Watch Filing/Claim Deadlines:** For ERC and other tax credits, late claims may have limited eligibility under the revised rules. Proactively check eligibility.
## Case in Point
- A car dealership that originates personal vehicle loans should prepare notices or statements for borrowers about deductible interest, and ensure accounting software captures the required information.
- Payment platforms should monitor transactions from users and ensure that they're ready to issue 1099-K forms for amounts exceeding $20,000 in gross payments.
## Conclusion
With OBBB comes both opportunity and responsibility. Staying compliant means understanding IRS guidance, adjusting internal processes, and timely responding to changes. Penalties can often be avoided with early action and good documentation.