IRS Relief Payment 2025: U.S. Treasury and IRS Announce Penalty Waiver for New Remittance Tax

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have announced new IRS relief payment 2025 measures to help remittance transfer providers adjust to a recently introduced excise tax. The guidance, issued on October 7, 2025, provides temporary penalty relief for companies required to collect and deposit the new remittance transfer tax under the One, Big, Beautiful Bill (OBBB).

This relief will cover the first three quarters of 2026, helping businesses comply with the new law while avoiding costly penalties during the transition period. The decision comes as many providers prepare to adapt to a 1% tax on certain remittance transfers starting January 1, 2026.

Penalty Relief Details for Remittance Transfer Providers

According to IRS Notice 2025-55, remittance transfer providers who fail to deposit the correct amount of excise tax during the first three quarters of 2026 may avoid deposit penalties if they meet specific conditions. These conditions include making timely deposits — even if the amounts are miscalculated — and ensuring any underpayment is fully paid by the due date of the Form 720, Quarterly Federal Excise Tax Return for that period.

The IRS also confirmed that providers can rely on existing “safe harbor” rules for deposits under the Excise Tax Procedural Regulations, even if underpayments occur. However, companies must demonstrate “reasonable cause” to qualify for penalty relief. This approach is designed to ease the transition as businesses update systems to calculate and remit the new tax accurately.

The remittance transfer tax — set at 1% — will apply when individuals send funds using cash, money orders, cashier’s checks, or similar physical instruments. The first semi-monthly deposit deadline under the new rule is January 29, 2026.

Industry Impact and Transition Period

The Treasury and IRS acknowledged the compliance challenges for remittance service providers as they prepare for the first year of the OBBB’s excise tax. Many companies will need to upgrade reporting systems, adjust cash transfer processes, and train staff on the new requirements. By waiving penalties for early underpayments, the IRS aims to ensure a smoother rollout and avoid disruptions in international money transfers.

Tax professionals suggest this relief could reduce the administrative burden and protect businesses from unexpected penalties while they adapt to the new tax regime. However, experts still urge companies to stay proactive — including reviewing payment systems and consulting tax advisors before the first deposits are due in January 2026.

This IRS relief payment 2025 announcement signals the agency’s intent to support compliance while ensuring the new excise tax system takes effect as planned.

FYI (keeping you in the loop)-

Q1: What is the new remittance transfer tax under the OBBB?

The tax is a 1% charge on certain remittance transfers made with cash, money orders, cashier’s checks, or similar instruments starting January 1, 2026.

Q2: Who qualifies for the IRS penalty relief in 2026?

Remittance transfer providers that make timely deposits, even if miscalculated, and pay any shortfall by the Form 720 due date may qualify.

Q3: How long does the penalty relief last?

The relief applies to the first three quarters of 2026, ending after providers have time to adjust to the new system.

Q4: Does this affect individuals sending remittances?

No, the relief is for remittance service providers, not individual senders. The 1% tax may still be passed on to customers.

Q5: When is the first deposit deadline?

The first semi-monthly deposit for the new tax is due January 29, 2026.

References

Internal Revenue Service. (2025). Treasury, IRS provide penalty relief for remittance transfer providers who fail to deposit excise tax under the One, Big, Beautiful Bill. October 7, 2025.

Associated Press. (2025). IRS to offer transition relief for new remittance transfer tax. October 7, 2025.

Reuters. (2025). U.S. Treasury issues guidance on new remittance tax compliance. October 7, 2025.