SECTION 3. GRANT OF RELIEF

To provide a transition period for remittance transfer providers to familiarize themselves with the new tax and its reporting and deposit requirements, the Department of the Treasury and the IRS have determined that it is in the interest of sound tax administration to provide relief from the section 6656 penalty with respect to remittance transfer tax deposits for the first three calendar quarters of 2026. Specifically, for semimonthly periods in the first three calendar quarters of 2026, a remittance transfer provider will be deemed to have satisfied the reasonable cause standard under section 6656 if: (i) the remittance transfer provider makes timely deposits of the applicable remittance transfer tax, even if the deposit amounts are computed incorrectly, and (ii) the amount of any underpayment of the applicable remittance transfer tax for each calendar quarter is paid in full by the due date for filing the Form 720 for that quarter.

In addition, a remittance transfer provider’s ability to use the deposit safe harbor under § 40.6302(c)-1(b)(2) will not be affected by a failure during the first three calendar quarters of 2026 to make deposits of the remittance transfer tax as required under part 40, provided the remittance transfer provider satisfies the reasonable cause standard for those quarters.