Want to Use IRIS? Start Now

If you haven't started your move from FIRE to IRIS yet, you'll want to start as soon as possible.

Backstory

The IRS has maintained two systems for e-filing of 1099s – FIRE and IRIS. FIRE is going out of service at 3 pm Eastern time on November 19, leaving IRIS as the only system available.

Who This Does and Does NOT Affect

If you already have a filing solution in place for your 1099s (DIY in IRIS, or partnering with a vendor), then this doesn't apply to you.

This DOES apply to those who have used FIRE themselves in the past, and who haven't settled on a new way of doing things yet.

Options

Filers have two options:

1. Do it yourself in IRIS;

2. Partner with a vendor.

With either option, you'll want to start now with getting things in place. This is true even though it's mid-September (as this article is published) and 1099 filing is still almost four months away.

DIY in IRIS

If you want to do it yourself in IRIS, it's important to understand that you can't just set up an account in January and be good to go.

First, you'll need to navigate getting a login. It is not a joke to say the login process is the number one complaint I receive about IRIS.

Once you clear the login hurdle, you'll need to decide which version of IRIS you want to use. Your options are:

1. Taxpayer portal. Accepts CSV files. The IRS even provides a template. You're limited to no more than 250 entries per file (so if you have 1,000 forms to file, you'd need to create 4 separate CSV files and upload one at a time).

2. Application to Application (A2A). A2A has no restrictions on the amount of information you can send at one time, but the files must be in XML format.

You cannot casually switch between systems. Each system requires its own application and you'll be given a TCC for whichever system you want to use.

Also note that if you have a FIRE TCC, it will not work in IRIS.

The takeaways here are:

1. Logins are a pain – start sooner rather than later on figuring this out.

2. TCCs arrive by mail and can take up to 45 days to receive. If you apply in January, you probably won't get the TCC before the filing deadline.

3. A2A requires you to submit test files through the system before you can use it for real.

All of this means, "plan accordingly" to get everything set up and ready to go before you need to file anything.

Partner with a Vendor

I highly recommend partnering with a vendor. They do charge a fee, of course (while DIY in IRIS is free [you might need to spend money on file formatting, but the IRS doesn't charge to use the system]) but you're paying for the convenience factor. The vendor is the one connected to IRIS, and they handle all the specifics.

Even here, there are timelines involved. For example, there is often an onboarding period, especially for larger filers. If you wait until January, you might find that most vendors tell you they can't help you, or they can help you but can't guarantee that you'll be set up in time to file by January 31.

An onboarding period might be required of smaller filers, too. And even if there's not an onboarding period, there will be a learning curve. You don't want to be trying to learn a new system on January 31.

Conclusion

All of this is to say: start now on figuring out how you're going to get your 1099s filed come January.