Episode 45: Want to Use IRIS? Start the Process Now

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Welcome to another information return intelligence powered by IOFM. My name is Jason Dinason. This week we're talking about the switch from fire to Iris and how you really want to start that move now and not wait until January. It seems like that's a long ways off yet, as this episode drops in mid-September. You've still got three and a half, probably more like four months or so before you'll actually be filing anything. But you don't want to wait until January, and we'll talk about why on today's episode. First are disclaimers. This is not tax advice. There's a lot of great stuff in information return intelligence, but it's not tax advice, and I am not your accountant, so never make final decisions based on anything you see or hear in this podcast. Always pay your own advisors before making final decisions. And now on to the show. We've talked many times about fire being shut down, so we're not going to revisit that other than to just remind you that 3 PM on November 19th is the end of the road for fire, and then it is going away, and Iris will be it. So the whole purpose of today's episode is to talk about what are your options now with fire going away and how you really need to get on top of this now if you haven't already. We're gonna talk about why that is. Now who does this not apply to? This doesn't apply to you if you already have a filing solution in place for your 1099s and 1042s. Maybe you already are set up on Iris to do it yourself, or you're already partnering with a vendor. If you are, then this discussion doesn't apply to you. It actually kind of does, though, as those words come out of my mouth. If you're using Iris yourself, but you're like, you know what, I might want to partner with a vendor, start that process now. Or maybe you're partnering with a vendor and you're like, you know, maybe I'll just do it myself in Iris. Start that process now. And certainly if you've been a fire user in the past, and you haven't figured out what you're going to do yet, it's time to get on it. I know it's mid-September, and if you do math in your head, three months, that puts us still in December. Three months from now isn't even Christmas Day yet. So it's really like four months before mid-January. Seems like you've got plenty of time, but you really don't, and that's the whole point of today's episode is to walk through what do you have to do to either use Iris or partner with a vendor. There are timelines involved under either option. So what are those options? One, do it yourself in Iris or partner with a vendor. So let's talk about those two options and start with do-it-yourself in Iris. The first thing you'll need to do is get a login, which doesn't sound too bad, but that's actually the number one complaint that I get about Iris. It is shockingly difficult to get a login to Iris. Once you have cleared that hurdle, then you're gonna have to decide on a system that you want to use within Iris. Iris has two options for what you can do. There's the taxpayer portal, and there's what's called application to application or A2A. The taxpayer portal is the simpler version of Iris. Taxpayer portal accepts CSV files, and the IRS even gives you a template. There's no programming involved. There is some labor involved with getting things out of your system and into that CSV file in the proper format and everything that the IRS wants in that CSV file. But that's a simpler option than A2A. But let's stay on taxpayer portal for just a second. So CSV files, the IRS gives you a template. Your CSV file can have no more than 250 entries per file. So if you have a thousand tenines that you need to send to the IRS, you'd have to create four separate CSV files and upload them one at a time. And that might not sound so bad, but at a certain point that's going to be a little annoying to have to create all those CSV files. It could end up being a lot of CSV files. The intention is if you're doing more than 250 forms, that you really are using A2A. Now to be clear, that's not a requirement though. You could use the taxpayer portal and upload dozens or even hundreds of CSV files if that's what you wanted to do. It just would become cumbersome at a certain point. So the other side is A2A, where there's no restriction on the amount of information you can send. You could send an unlimited number of forms at one time. However, your files have to be in XML format. So there's some programming involved, the formatting is more difficult. While it's free to use Iris, you might have to spend money on software to get things in the right format if you're planning to use A2A. So those are your two options in Iris, the taxpayer portal and A2A. You cannot just switch between the two systems. You can't say, okay, I'll try the taxpayer portal, and oh, I've got a lot of forms to file, so I guess I'm gonna just switch over to A2A. Or you're using A2A and it's that's a hassle, I'll just do the CSV files and the taxpayer portal. You can't just casually switch between systems. When you apply to use Iris, you have to decide which one you're going to use because you get a TCC, a transmitter control code, and each system within Iris has its own application, and you'll be given a TCC for whichever system you want to use. So if you do want to switch between systems, you would have to apply for both systems and get separate transmitter codes. By the way, if you have a fire TCC, it will not work in Iris. If you're planning to use Iris, you have to apply for a new TCC and an entirely new setup in Iris. So if you're planning to do it yourself in Iris, why start now? There are several reasons. One is logins are a pain, and starting now will help avoid headaches later on, much closer to the deadline. If you're trying to figure out the login process, it's better to have that figured out now. The other thing that you don't want to be dealing with in January is applying for one of the systems in Iris and getting that transmitter code. TCCs are not just generated automatically and given to you. The IRS will mail you your TCC. And it can take up to 45 days to get it. So if you apply in January, you probably won't get it before the filing deadline. And then the third thing would be if you're using the A2A side of Iris, you are required to submit test files through the system before you can use it for real. That's only if you're planning to use A2A. But that would be another hurdle that you would have to clear. So when you start thinking about this, if the deadline is January 31st, 45 days before that puts you in mid-December. Now add in things like holidays. I mean, technically the IRS would only be closed on like Christmas Day and New Year's Day, but I wouldn't want to be waiting on that transmitter code, applying for it in mid-December and hoping it arrives by January 31st. The other thing is you want that transmitter code and the logins figured out so you can log into the system and take a look at it before you actually have to do anything in it. So start now if you plan on using Iris yourself. And now let's hear a word from our sponsor, IOFM. IOFM is the trusted source for education and information in the financial operations world. With a universe of over 100,000 financial operations professionals, growing certification and membership programs, and a keen understanding of the issues and content needs critical to the profession, IOFM is the trusted source of information in the rapidly evolving field of financial operations. Learn more about IOFM at IOFM.com And now back to the show. Now let's talk about partnering with a vendor, which is something by the way that I highly recommend is partnering with a vendor. They do charge a fee, and some people are like, well, I'll just do it myself and save money. It is true that you obviously would save money doing it yourself, because the IRS doesn't charge you to use IRIS. They didn't charge for the fire system either. It's free to use these systems. But you have to know what you're doing, and there's also a time value of money. How much is your time or your staff's time worth and all the headaches and stuff? See the vendor, they're the one who deals with those connections with Iris and all the technicalities of everything. That is the big appeal of partnering with a vendor. Now even here, partnering with a vendor, there are timelines to watch. It's not quite as simple as just saying on January 30th, I'm gonna use this place to file my 1099s, and you just go and you do it. I mean maybe if you have one form that you need to file, maybe, maybe that would work, but really that's not what you want to do. Even if you're partnering with a vendor, there are timelines, especially for larger filers, you'll find that there is probably an onboarding period. And there's just a learning curve, too. So there's onboarding and there's figuring out how to use the system and getting everything done by January 31st so that you can push submit and send off the e-file. You very well may find if you wait until January and you're a larger filer, a vendor would probably say, Yeah, we can help you. But they might also say, because of the onboarding period, we can't guarantee that you'll be set up and ready to go by January 31st. So that's why you want to start now on finding a vendor if that's the option that you want to go with. Even if you're a smaller filer, and by the way, what are my definitions here of larger and smaller filers? I don't know. I think you would have to decide for yourself am I a larger filer or a smaller filer? The point is, there may be an onboarding period for small filers too, and even if there's not, there's a learning curve involved. So whether you're a large filer or a small filer, you don't want to be navigating these things in some vendor's system in January trying to figure all of this out. Start now. That brings us to the end of another episode of Information Return Intelligence. We do this every week. Yes, there really are things to talk about every single week with 1099s. So join us again next week. Information Return Intelligence is powered by IOFM and produced by Dinason Media Ventures. You can find all of our podcasts at podcast.dinasynmedia.com. Thank you, and we'll talk to you again next week. Dynason Media Ventures.