IRIS Updates for 2024

The IRS introduced a new system for 1099 reporting last year called IRIS (Information Return Intake System). This new IRIS system will soon replace the traditional FIRE system. However, for the 2024 Tax Year, this new system will coexist with the current FIRE system.

TaxBandits now offers filing with both the IRIS and FIRE systems, giving you the flexibility to choose the integration that best suits your needs. If you choose to stick with the FIRE system for this tax season, then there are no changes required to the system, and the current integration will work fine.

If you decide to move forward with the IRIS system, you should make the following necessary changes to the API JSON.

New Business Rule Changes in the IRIS system

• Payer Name - Previously, the IRS required a single name for both individual and business payers. However, with the IRIS updates, this criteria has changed.

  • If the payer is an individual, you must provide their "First Name", "Middle Name", "Last Name", and "Suffix".

  • If the payer is a business, you should submit the "Business Name" and if applicable, the "Trade Name".

• Recipient Name - For recipients, the IRS previously required a single name, regardless of whether the recipient was an individual or a business. However, with the IRIS updates, this criteria has changed.

  • If the recipient is an individual, you are required to submit their "First Name", "Middle Name", "Last Name", and "Suffix" .

  • If the recipient is a business, both the "Business Name" and "Trade Name" (if available) must be provided.

• Accepted with Errors - The IRS now verifies the recipient's Name and TIN submitted on Form 1099 and may issue a new status called "Accepted with Errors". If a return is accepted with errors, the payer must file a correction with the correct name and TIN for the recipient.

• Status Updates - Unlike the FIRE system, which took 2-3 days to provide status updates, the IRIS system delivers status updates for 1099 filings almost immediately.

Our API Endpoint Changes

To align with the IRIS updates, we have made a few changes to our API endpoints. All the 1099 endpoints will have new nodes introduced in "SubmissionManifest", "Business" and "Recipient" objects. In addition, there will be a new status "Accepted With Errors" for the 1099 forms.

• SubmissionManifest - We have introduced a new node, "IRSFilingType", which allows you to enter the filing type as "IRIS" or "FIRE".

  This is an optional field, and if you choose not to provide this information, the value will be set as "FIRE", and the 1099s will be submitted to the IRS via the FIRE system by default.

  "SubmissionManifest":{
      "SubmissionId": null,
      "TaxYear": "2024",
      "IRSFilingType": "IRIS",
      "IsFederalFiling": true,
      "IsStateFiling": true,
      "IsPostal": true,
      "IsOnlineAccess": true,
      "IsScheduleFiling": true,
      "ScheduleFiling": false
  }

• Business - In the FIRE system, you are required to provide payer information in the 'BusinessNm' field, regardless of whether the payer is an individual or a business. However, with the IRIS update, we have introduced separate fields for names based on the payer's type, allowing you to distinguish between individuals and businesses when entering data.

  note

  This is applicable only if you have opted for 'IRIS' in the “IRSFilingType” node in the SubmissionManifest.

  If the payer is an individual, use the following nodes.

  Field	Type	Description
  FirstNm	string	First Name of the Individual. Size Range: ..20
  MiddleNm	string	Middle Name of the Individual. Size Range: ..20
  LastNm	string	Last Name of the Individual. Size Range: ..20
  Suffix	string	Suffix. Size Range: ..20

  If the payer is an business, use the following nodes.

  Field	Type	Description
  BusinessNm	string	Name of the business. Size Range: ..75
  TradeNm	string	Name under which the business operates . Size Range: ..75

• Recipient - In the FIRE system, you are required to provide recipient information in the 'FirstPayeeNm' field, regardless of whether the recipient is an individual or a business. However, with the IRIS update, we have introduced separate fields for names based on the recipient's type, allowing you to distinguish between individuals and businesses when entering data.

  note

  This is applicable only if you have opted for 'IRIS' in the “IRSFilingType” node in the SubmissionManifest.

  If the recipient is an individual, use the following nodes.

  Field	Type	Description
  FirstNm	string	First Name of the Individual. Size Range: ..20
  MiddleNm	string	Middle Name of the Individual. Size Range: ..20
  LastNm	string	Last Name of the Individual. Size Range: ..20
  Suffix	string	Suffix. Size Range: ..20

  If the recipient is a business, use the following nodes.

  Field	Type	Description
  FirstPayeeNm	string	Enter the recipient's business name here. Size Range: ..40
  SecondPayeeNm	string	If there are multiple recipients (for example, partners, joint owners, or spouses), use this field for those names not associated with the TIN or if not enough space was provided in the First Payee Name, continue the name in this field. Size Range: ..40

  "Recipient": {
          "RecipientId": null,
          "TINType": "EIN",
          "TIN": "39-3817572",
          "FirstPayeeNm": "Dairy Delights LLC",
          "SecondPayeeNm": null,
          "FirstNm": null,
          "MiddleNm": null,
          "LastNm": null,
          "Suffix": null,
  }

• Status and Webhook - In addition to the existing IRS status codes 'Accepted' and 'Rejected', you may now receive the status 'Accepted with Errors' when using the Status endpoint or Webhooks for 1099 forms.

  If you receive this status, you must file a correction to fix the errors.