Compliance
Staying Compliant with the OBBB: Key Reporting Reliefs & IRS Guidance You Need
New IRS reliefs under the One, Big, Beautiful Bill offer leniency for employers and businesses facing recently expanded reporting requirements—crucial for avoiding penalties.
By NomadicTax Research Team • 5-8 min read • November 20, 2025
## What’s the One, Big, Beautiful Bill (OBBB)?
The OBBB is landmark U.S. legislation introducing new tax, reporting, and compliance requirements, particularly for **information reporting**—including cash tips, overtime compensation, digital assets, and car loan interest. Many of these rules began or will begin in **tax year 2025**. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Recent Relief Measures to Know
- The IRS/Treasury has issued **penalty relief** for employers/payors for tax year 2025 under new reporting requirements for **cash tips and qualified overtime compensation**. Employers who are learning to adapt can benefit while implementing systems. ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom?utm_source=openai))
- There’s **transitional guidance on reporting car loan interest** received in 2025—delaying strict enforcement and helping lenders adjust practices. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
- The IRS reverted the **Form 1099-K reporting threshold** back to **$20,000 and 200 transactions**, removing lower thresholds imposed by earlier laws. For many small payees, this removes the burden of filing 1099-K unless they exceed both metrics. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Action Steps for Businesses & Employers
1. **Review existing payroll & bookkeeping systems** to capture overtime, tip income, and tip reporting correctly—that may require upgrading software or re-training staff.
2. **Stay within the IRS deadlines** for implementing car loan interest reporting guidance—transitional reliefs may limit exposure but don't erase future liability.
3. **Evaluate Form 1099-K exposure**: if small vendors or contractors fall under the old/amended thresholds, ensure you’re aware of when and if each party is required to report.
4. **Document processes carefully**, showing you’re following guidance in case of audit. Reliefs often depend on demonstrating that you're making a good-faith effort under new rules.
5. **Consult experts**: Many of the reliefs are temporary or tied to representations/requirements. Tax advisors or compliance officers can help clarify what applies to your specific structure.
## Practical Example: Café Owner
- Café A’s employees often receive cash tips; under OBBB, new reporting requirements for tips and overtime might have triggered penalties. Thanks to the newly announced guidance, Café A gets **penalty relief** for 2025, giving time to adjust its accounting.
- If *Car Loan Company B* must report interest as business income under new rules, transitional guidance gives it a window to update contracts and reporting systems without immediate penalty exposure.
## Risks If You Don’t Comply
- Missing reporting on tips/overtime or car loan interest may result in **penalties**, once relief windows close.
- Under-reporting or inaccurate 1099-K filings once thresholds are triggered can lead to audits or interest on unpaid taxes.
- Lack of documentation and process changes may weaken any claimed relief in case of review by the IRS.
## Final Thoughts
The OBBB represents a significant shift in U.S. tax compliance. Recent IRS reliefs ease the transition, but businesses must be proactive—adjust systems, track deadlines, and document changes to stay compliant and avoid penalties in the long run.