This is why Bitcoin Wins.....
Congress passed a law (in the *One Big Beautiful Bill Act*) that adds a **1% federal excise tax** on certain **outgoing remittance transfers**—basically, when someone in the U.S. sends money abroad **using cash or similar instruments**. The IRS is now proposing the detailed rules for how that tax will apply.
---
### 💵 When the 1% tax applies
The tax applies **only** when the sender funds the transfer with:
- **Cash**
- **Money orders**
- **Cashier’s checks**
- **Traveler’s checks** (newly added in the proposed regs)
- **A check that the provider cashes** and then uses to fund the transfer (the IRS says this counts as a cash transaction)
It **does NOT apply** when the transfer is funded by:
- A bank account (checking, savings, credit union, etc.)
- A U.S.-issued debit or credit card
---
### 📌 Key points the proposed regulations clarify
- **No small‑provider safe harbor**:
Regulation E normally exempts small remittance providers (under 500 transfers/year).
**The IRS rejected that exemption.**
Even tiny providers must collect the 1% tax.
- **Tax base**:
The 1% is calculated on the **amount sent to the recipient**, including:
- Promotional bonuses or incentives added to the transfer
But **excluding**:
- Service fees
- The excise tax itself
- **Who pays and who files**:
The **sender** owes the tax, but the **remittance transfer provider** must collect it and remit it on **Form 720** quarterly.
If the provider fails to collect it, **they** become liable.
- **Effective date**:
Applies to transfers **after 12/31/2025**.
Taxpayers can rely on these proposed rules until final regulations are issued.
- **Public comments**:
IRS is accepting comments until **June 12, 2026**.
---
### 🧠 What this means in practice
If someone walks into a store or money‑transfer business and pays **cash** to send $500 to another country, the provider must charge an additional **1% excise tax ($5)** and remit it to the IRS.
If the same person pays using a **bank account or debit card**, **no excise tax** applies.
---
If you want, I can break down how this might affect specific businesses (e.g., check cashers, convenience stores, money transmitters) or how compliance works for Form 720.
Congress passed a law (in the *One Big Beautiful Bill Act*) that adds a **1% federal excise tax** on certain **outgoing remittance transfers**—basically, when someone in the U.S. sends money abroad **using cash or similar instruments**. The IRS is now proposing the detailed rules for how that tax will apply.
---
### 💵 When the 1% tax applies
The tax applies **only** when the sender funds the transfer with:
- **Cash**
- **Money orders**
- **Cashier’s checks**
- **Traveler’s checks** (newly added in the proposed regs)
- **A check that the provider cashes** and then uses to fund the transfer (the IRS says this counts as a cash transaction)
It **does NOT apply** when the transfer is funded by:
- A bank account (checking, savings, credit union, etc.)
- A U.S.-issued debit or credit card
---
### 📌 Key points the proposed regulations clarify
- **No small‑provider safe harbor**:
Regulation E normally exempts small remittance providers (under 500 transfers/year).
**The IRS rejected that exemption.**
Even tiny providers must collect the 1% tax.
- **Tax base**:
The 1% is calculated on the **amount sent to the recipient**, including:
- Promotional bonuses or incentives added to the transfer
But **excluding**:
- Service fees
- The excise tax itself
- **Who pays and who files**:
The **sender** owes the tax, but the **remittance transfer provider** must collect it and remit it on **Form 720** quarterly.
If the provider fails to collect it, **they** become liable.
- **Effective date**:
Applies to transfers **after 12/31/2025**.
Taxpayers can rely on these proposed rules until final regulations are issued.
- **Public comments**:
IRS is accepting comments until **June 12, 2026**.
---
### 🧠 What this means in practice
If someone walks into a store or money‑transfer business and pays **cash** to send $500 to another country, the provider must charge an additional **1% excise tax ($5)** and remit it to the IRS.
If the same person pays using a **bank account or debit card**, **no excise tax** applies.
---
If you want, I can break down how this might affect specific businesses (e.g., check cashers, convenience stores, money transmitters) or how compliance works for Form 720.
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