Compliance
US Tax Guidance for Remittance Transfers & Car Loan Interest Reporting Under New Legislation
Business entities need to pay close attention to recent IRS guidance on reporting car loan interest and remittance-transfer excise tax under the One, Big, Beautiful Bill, especially as relief and deadlines shift.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## Key Highlights of Recent IRS Guidance
This article unpacks two tax policy updates from late October 2025 that affect businesses and remittance providers: transitional guidance for reporting **car loan interest**, and **penalty relief** for remittance-transfer excise tax requirements. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
### 1. Car Loan Interest Reporting Relief
- Under the OBBBA, businesses must begin reporting interest they receive on **car loans** in 2025. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- The IRS provided **transition relief** through Notice 2025-57. This means certain lenders are temporarily relieved from penalties if they meet the new requirements for interest reporting. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
### 2. Remittance Transfer Tax Penalty Relief
- A new excise tax under OBBBA applies to remittance transfers. Notice 2025-55 grants **penalty relief** for the first three calendar quarters of 2026 for providers who fail to deposit the required tax. ([irs.gov](https://www.irs.gov/irb/2025-43_IRB?utm_source=openai))
- Remittance transfer providers who meet specified criteria will also be able to use a **deposit safe harbor**, as long as the failure is during those quarters and reasonable cause is shown. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Strategies for Businesses & Providers
- **Remittance providers**: Review whether your operations will trigger the tax under section 4475. If yes, document your expected deposits and timeline. Use the safe harbor and ensure you show reasonable cause for any delays in deposits during the relief period.
- **Lenders**: For car loan interest reporting, identify whether you are obligated to report in 2025 under OBBBA’s amended IRC § … . If unsure, consult Notice 2025-57 and determine if your institution qualifies for the transitional relief.
- **Compliance departments**: Track upcoming deadlines closely. Ensure that systems are updated to capture interest receipts and remittance transfers properly. Prepare for penalties outside the relief period.
## Example Scenario
A bank issues auto loans and had not previously tracked car loan interest reporting. In late 2025, they begin tracking. Because they just started, they may qualify for transition relief under Notice 2025-57 and avoid penalties for reporting mistakes in 2025.
Similarly, a money transfer business operating remittance services—if the business misses a deposit in the first quarter of 2026—may avoid penalties provided they apply Notice 2025-55 rules and satisfy safe harbor and reasonable cause criteria.
## Key Deadlines & Watchpoints
- **2025**: Start reporting car loan interest as required under OBBBA; transitional relief applies.
- **Quarters 1-3 of 2026**: Penalty relief window for remittance transfer providers.
- Be alert: once these relief periods expire, full compliance becomes mandatory—with full penalties.
## Takeaway
These updates give businesses important breathing room—but only briefly. If you potentially fall under the new rules, take advantage of relief windows, ensure your internal reporting processes are up to date, and avoid surprises when grace periods end.