Blog · 14 October 2026

Remittance Excise Tax Under Notice 2026-52: §4475 Penalty Relief Extended and What US CPA Firms Should Tell Clients

By Keshav Bansal, CA

Remittance excise tax penalty relief under IRS Notice 2026-52 continues past the original September 30, 2026 cutoff in Notice 2025-55. For US CPA firms with money-transmitter, fintech or retail-agent clients that collect the 1% IRC §4475 tax on cash-funded outbound remittances, the notice keeps a deemed-reasonable-cause path for §6656 deposit failures until final §4475 regulations apply—so long as deposits stay timely and quarterly underpayments are paid by the Form 720 due date.

What IRC §4475 taxes

Section 4475, added by P.L. 119-21 (OBBBA) §70604 and effective for transfers made after December 31, 2025, imposes a tax equal to 1 percent of the amount of a remittance transfer. Per the Cornell LII text of the statute:

• The tax is paid by the sender (§4475(b)(1)).
• The remittance transfer provider must collect it from the sender and remit it quarterly to the IRS (§4475(b)(2)).
• If the tax is not collected when the transfer is made, the provider is secondarily liable (§4475(b)(3)).
• The tax applies only when the sender funds the transfer with cash, a money order, a cashier’s check, or any other similar physical instrument as determined by the Secretary (§4475(c)).
• It does not apply when funds are withdrawn from a qualifying financial-institution account under §4475(d)(1), or funded with a US-issued debit or credit card under §4475(d)(2).

Definitions of “remittance transfer,” “remittance transfer provider” and “sender” cross-reference section 919(g) of the Electronic Fund Transfer Act. The June 2026 Instructions for Form 720 confirm providers report the tax on Form 720 (IRS No. 155), make semimonthly deposits, and that the first semimonthly deposit was due January 29, 2026.

What Notice 2025-55 covered—and what expired

Notice 2025-55, 2025-43 I.R.B. 625, gave temporary §6656 relief: a provider was deemed to satisfy reasonable cause if (i) it made timely deposits even when amounts were computed incorrectly, and (ii) any quarterly underpayment was paid in full by the Form 720 due date. It also protected the Treas. Reg. §40.6302(c)-1(b)(2) deposit safe harbor for the first three calendar quarters of 2026 when that standard was met. Per Notice 2026-52’s background, that relief did not apply to calendar quarters beginning after September 30, 2026.

What Notice 2026-52 extends

Notice 2026-52 (September 24, 2026; principal author Michael H. Beker, Associate Chief Counsel (Energy, Credits, and Excise Tax)) modifies and amplifies Notice 2025-55 to continue the transition while §4475 rules are finalized. For semimonthly periods ending before the applicability date of final regulations under section 4475:

• Deemed reasonable cause (§6656): the provider is deemed to satisfy the reasonable-cause standard if (i) it makes timely deposits of the applicable remittance transfer tax, even if deposit amounts are computed incorrectly, and (ii) any underpayment for each calendar quarter is paid in full by the due date for filing Form 720 for that quarter.
• Deposit safe harbor preserved: ability to use Treas. Reg. §40.6302(c)-1(b)(2) is not affected by a failure to deposit remittance transfer tax for such a semimonthly period, provided the provider satisfies the reasonable-cause standard for that failure.

Bloomberg Tax (September 24 and 28, 2026) and KPMG TaxNewsFlash (September 24, 2026) corroborate the same two conditions and the tie to final-reg applicability. Proposed regulations appeared in the Federal Register on April 13, 2026 (91 Fed. Reg. 70); until final regulations apply, Notice 2026-52’s window remains open under its own terms.

What the relief does not do

Notice 2026-52 is deposit-penalty and safe-harbor relief, not a tax holiday. The 1% tax still applies to covered remittances after December 31, 2025. Late or skipped deposits without a timely deposit and a Form 720 true-up still risk §6656. The notice does not bless incorrect funding-method classifications; it only softens deposit-computation risk when deposits are timely and the quarter is paid up by the Form 720 due date. Providers who fail to collect remain secondarily liable under §4475(b)(3)—outside the §6656 deemed path.

What US CPA firms should tell clients now

• Map funding methods at the point of sale: cash / money order / cashier’s check / similar physical instruments are in; account withdrawals and US debit/credit cards are out under §4475(c)–(d), subject to final regs.
• Keep semimonthly deposits on calendar even when the exact tax base is still being refined—timeliness is half of the Notice 2026-52 safe harbor.
• True up on Form 720 each quarter by the return due date; an unpaid quarterly underpayment breaks the deemed reasonable-cause path.
• Document deposit computations (even if later corrected) so Exam can see the timely-deposit prong was met.
• Watch final §4475 regulations for the applicability date that ends this relief window; proposed rules from April 13, 2026 are not the finish line.
• Separate income-tax clients from excise clients—the remittance tax is on Form 720, not the sender’s Form 1040, which is the same “transaction tax vs income tax” framing used for other chapter 36/Form 720 items in our intermediate sanctions / §4958 coverage of nonprofit excise exposure.

A short firm checklist

1. Identify every client that is a remittance transfer provider (or agent collecting for one) under the EFTA definition incorporated by §4475(e).
2. Confirm Form 720 (IRS No. 155) filing and semimonthly deposit procedures are live for Q4 2026 and beyond.
3. Reconcile year-to-date deposits to collected tax; schedule any underpayment payment before the next Form 720 due date.
4. Refresh agent scripts so staff do not quote Notice 2025-55’s September 30, 2026 end date—Notice 2026-52 replaced that clock with final-reg applicability.
5. Tie deposit-penalty exposure to broader OBBBA implementation work already on firm calendars (for example 2026 §199A / QBI and draft 2027 Form W-4 changes), and keep collection/penalty playbooks from the IRS collection alternatives guide handy if §6656 assessments arrive despite the notice.

Where this fits for Tax Brew readers

Notice 2026-52 is operational guidance for a 1% remittance excise tax already in force. Firms that serve money-services businesses need deposit calendars, Form 720 true-ups and funding-method coding—not a pause until final regulations publish.

If Form 720 workpapers or deposit reconciliations are stretching capacity, outsourced tax prep and bookkeeping support for US CPA firms can take the data gathering while your signing professionals keep the judgment calls. Email info@taxbrewglobal.com.

Check current IRS guidance: IRC §4475 (Cornell LII / P.L. 119-21 §70604); Notice 2026-52 (irs.gov/pub/irs-drop/n-26-52.pdf); Notice 2025-55 (modified/amplified); June 2026 Form 720 instructions; 91 Fed. Reg. 70 (April 13, 2026); KPMG TaxNewsFlash and Bloomberg Tax (September 24–28, 2026). Confirm current IRS.gov guidance before advising clients. General information, not tax or legal advice. Sources as of 14 October 2026.