A major shift in how organisations file information returns with the IRS is fast approaching, and RegTech firm Comply Exchange is urging withholding agents not to underestimate the work involved.
The FIRE system — a fixture of electronic tax filing for more than 30 years — will be permanently retired on 31 December 2026, and its replacement, the Information Returns Intake System (IRIS), is already live and processing returns.
The RegTech company recently delved into what withholding agents need to do before the 2027 deadline.
For many compliance teams, the transition may sound straightforward on paper. In practice, it carries significant operational implications, particularly for organisations that have grown accustomed to the rhythms and tolerances of the legacy FIRE platform.
FIRE was originally developed in the early 1990s and was built around file formats and processing models that now look distinctly dated. Filers using FIRE upload specially formatted text files and, historically, have had to wait hours or even days to learn whether a submission was accepted or rejected. IRIS changes this dynamic entirely. The new platform performs real-time validation at the point of submission, catching formatting errors, missing fields, and data inconsistencies immediately rather than surfacing them days later. For organisations with messy upstream data, that is a problem that can no longer be pushed downstream.
IRIS offers multiple routes into the system depending on an organisation’s size and technical capability. Smaller filers can use the IRIS web portal, while larger organisations and software providers can submit returns programmatically via application-to-application (A2A) transmission. Approved reporting platforms and tax software integrations round out the available options. Since launching in 2023, the platform has already processed millions of information returns, reflecting the IRS’s confidence in the new infrastructure.
The forms caught up in the migration span the breadth of the 1099 series — including Form 1099-MISC, 1099-NEC, 1099-INT, 1099-DIV, and 1099-B — as well as Form 1042-S. The IRS expanded IRIS to cover 1042-S filings from 1 January 2026, meaning filers can already use the system to submit 2025 returns due on 15 March 2026. After 31 December 2026, IRIS becomes mandatory for all of these form types, with no FIRE fallback available.
The 2026 filing season, during which both systems will run concurrently, represents what Comply Exchange describes as the ideal window for organisations to test IRIS workflows, stress-test internal processes, and identify gaps before the hard deadline arrives. That parallel running period should be treated as a dress rehearsal, not a grace period.
One administrative detail that Comply Exchange flags as frequently overlooked is the need for a new Transmitter Control Code (TCC). An organisation’s existing FIRE TCC does not carry over to IRIS — a separate application must be submitted through the IRS e-Services portal, and processing can take up to 45 days. Given filing deadlines are unforgiving, this is not a step that should be left until the final stretch of 2026.
Comply Exchange’s broader point is that IRIS readiness is as much about data quality as it is about system access. The platform’s real-time validation means that vendor details, account holder information, and tax documentation must be clean and complete before a submission is ever attempted. Organisations that have historically relied on spreadsheets, manual processes, or fragmented documentation workflows face the steepest learning curve.
For more insights into IRIS, read the full story here.
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