As an independent locum tenens physician or APP, you already juggle clinical demands, travel logistics, and business finances.
The last thing you need is more stress around tax compliance. Fortunately, the Opportunity for Better Business and Beneficial Accountability Act (OBBBA), sometimes called the “Big Beautiful Bill”, introduces several provisions designed to simplify reporting and reduce audit anxiety for 1099 professionals.
If you want a complete overview of all ten tax changes, see our guide on the 10 Big Beautiful Bill tax changes for locum tenens physicians. In this post, we focus specifically on simplified compliance and IRS protections so you can prepare with confidence.
The “Beautiful Bill” & Why It Matters to Locums
The OBBBA legislation was passed in 2025 in part to ease the administrative burdens on small businesses and independent contractors. For physicians working 1099 assignments, these changes are especially relevant because:
- Filing used to be complex. Locum tenens providers often handle multiple 1099s from different facilities and states, increasing the risk of reporting errors.
- Penalties were harsh. Even honest mistakes could result in fees, with few safety nets unless you could prove “reasonable cause.”
- Audit fears were real. With complicated rules and inconsistent guidance, many physicians worried about accidentally triggering IRS attention.
The OBBBA seeks to simplify compliance, protect taxpayers who make good-faith efforts, and provide clearer avenues for support.
Key Provisions In Compliance And IRS Protections
Simplified 1099-specific filing forms and schedules
The IRS is rolling out new streamlined forms and schedules designed specifically for 1099 contractors. These are expected to:
- Reduce the number of required schedules.
- Simplify income and expense reporting.
- Cut down on duplicate information across forms.
What this means for locums: Less paperwork, fewer opportunities for clerical errors, and a filing process that feels closer to a W-2 employee’s simplicity.
Good faith compliance clause
One of the most physician-friendly updates is the introduction of a “good faith compliance” clause.
- Definition: If you make a first-time reporting error but promptly correct it, penalties may be waived.
- IRS precedent: This builds on existing IRS reasonable cause rules, where penalty relief can be granted if you demonstrate “ordinary business care and prudence.”
- Practical steps for physicians:
- Review your returns after filing and flag discrepancies quickly.
- Submit corrections as soon as an issue is identified.
- Document your actions, including CPA notes, emails, and receipts, showing you acted in good faith.
Prompt correction matters. While “promptly” is not precisely defined, the IRS generally expects adjustments within the same tax year or shortly after an error is discovered.
IRS support hotline & other resources
Another new feature is the creation of an IRS support hotline dedicated to small businesses and independent contractors. While rollout dates are still being finalized, physicians can expect:
- Faster access to IRS representatives trained in 1099 and small business issues.
- Guidance on new forms and compliance provisions.
- Support for penalty relief or amendment procedures.
How to prepare before calling:
- Have your EIN/SSN, prior-year returns, and current records available.
- Write down your questions in advance.
- Keep a record of who you spoke with and what guidance was given.
Additional resources include updated IRS help tools and digital filing instructions.
What Locum Tenens Physicians Should Do Now
To benefit from these changes and avoid surprises, take these steps now:
- Review your bookkeeping system. Are you accurately tracking income, expenses, and 1099 forms?
- Create error-correction procedures. Schedule internal reviews before filing deadlines to catch mistakes early.
- Engage a CPA familiar with locum challenges. Multi-state filings, travel expenses, and entity setup all add complexity. Explore our guides on QBI deduction for locum tenens doctors and PTET/SALT workarounds for related strategies.
- Document everything. If you ever need to claim “good faith,” strong records will support you.
Common Questions & Concerns
Will this eliminate penalties entirely?
No. Penalties can still apply for repeated, uncorrected, or intentional errors. The protections apply primarily to first-time, promptly corrected mistakes.
What if I do not fix an error quickly?
Delays weaken your “good faith” argument. Correct as soon as possible to preserve protection.
Do these protections apply to state-level filings?
Not necessarily. States may still impose penalties. Review state-specific rules with your CPA.
How do I manage multiple 1099s from different facilities?
Consolidate records throughout the year. Use accounting software or a CPA to reconcile forms before filing.
Action Tip Summary & Next Steps
Here’s your compliance checklist:
- Update your bookkeeping and filing systems before the next tax season.
- Schedule a CPA-led compliance review.
- Audit last year’s forms to check for errors or opportunities to amend.
- Stay alert for IRS announcements on hotline availability and form changes.
- Keep documentation ready in case you need to demonstrate good faith.
Suggested timeline: Complete your internal review and CPA consultation before the next filing deadline to ensure alignment with OBBBA provisions.
Partner With The Doctor’s CPA
Tax compliance doesn’t have to keep you up at night. At The Doctor’s CPA, we specialize in helping locum tenens physicians adapt to changing IRS rules while minimizing penalties and reducing administrative stress. From simplified filing to state-specific requirements, we provide tailored support so you can focus on your patients, not paperwork.
Schedule a consultation today to review your compliance readiness and leverage the new IRS protections to your advantage.