If your business handles 1099s, W-2Gs, or other information returns, you know how important it is to keep the IRS happy. For decades, many businesses have relied on the IRS FIRE system to file these forms electronically. But a major update is happening right now. The IRS is officially retiring FIRE and replacing it with a brand-new system called IRIS.
Change can be frustrating, especially when it involves tax reporting. You might be wondering if you need to learn new software, hire an expert, or completely overhaul how you handle year-end tax season.
The good news is that you have plenty of time to prepare. This guide explains exactly what the shift from FIRE to IRIS means for your small business. You will learn why the IRS is making this change, how it impacts your filing process, and the simplest way to stay compliant without adding extra work to your plate.
What is the IRS FIRE System?
The Filing Information Returns Electronically (FIRE) system is the platform the IRS has used to process electronic information returns since the 1980s. For years, it has been the go-to method for submitting Forms 1099, 1042-S, and several other documents.
Because it was built on older technology, FIRE has some frustrating limitations for modern businesses. For example, if you make a mistake on a form, the system only alerts you after your entire submission is processed. Fixing that mistake usually means replacing the entire file, rather than just correcting the single error. It also has strict file size limits and uses an older text file format that is hard for modern software to read.
To modernize its infrastructure, the IRS will permanently decommission the FIRE system on December 31, 2026.
The Information Returns Intake System (IRIS):
To replace FIRE, the IRS introduced the Information Returns Intake System (IRIS). Officially launched in late 2025, IRIS is a modern, web-based platform built to handle the massive volume of electronic tax filings the IRS receives today.
IRIS is designed to make tax processing faster, more accurate, and entirely paperless over time.
Key Benefits of the IRIS System
While learning a new system sounds tedious, IRIS actually brings some helpful improvements for businesses:
- Real-time validation: The system flags errors before your submission is accepted, saving you from frustrating rejections later.
- Targeted corrections: If you make a mistake on one person’s 1099, you can fix that single record. You no longer need to resubmit your entire company file.
- Better formatting: IRIS uses XML, a structured data format that works seamlessly with modern accounting and tax software.
- Larger file sizes: You can upload files up to 250MB, a big step up from FIRE’s 100MB limit. However, those uploading over 250 forms may not use direct upload and rather need to use Application-to-Application (A2A) to upload data.
How This Shift Impacts SMBs
If your business files 10 or more information returns per year, you are required by law to file electronically. This means you will eventually need to use IRIS. Here are the specific changes you need to look out for.
Filing Volume Changes Your Approach
The IRS offers two different ways to use IRIS, depending on how many forms you file.
If you file fewer than 200 returns, you can use the IRIS Taxpayer Portal. This is a web-based system where you can manually enter data or upload a spreadsheet. You will need to create an ID.me account and apply for a specific IRIS Transmitter Control Code (TCC).
If you file 200 or more returns, you must use the Application to Application (A2A) method. This requires a direct, automated connection between your tax software and the IRS. You can no longer just upload a file to a portal at this volume. You will need a special A2A TCC and must pass testing requirements before you can file.
New Rules for Names
Under the old FIRE system, you could put a recipient’s first and last name in a single box. IRIS requires separate fields for the first name and the last name.
If your current payroll or vendor spreadsheets combine these names, you will need to separate them before you file. Failing to do so can cause a mismatch between the name and the Taxpayer Identification Number (TIN), which often triggers IRS penalties.
States Are Still Catching Up
While the federal government is moving to IRIS, most individual U.S. states still use the old FIRE format to process their information returns. During this transition period, businesses might find themselves doing double duty—filing one way for the IRS and another way for their state.
The Transition Timeline
The transition to the IRIS system is mandatory for all filers. If you plan to file manually for tax year 2026, preparation for the new system starts now.
- Tax Year 2025: This is the final year you can use the legacy FIRE system.
- December 31, 2026: The FIRE system is permanently shut down.
- Tax Year 2026 (Filed in early 2027): Mandatory IRIS filing begins for everyone.
Frequently Asked Questions About IRIS
Can I still use my old FIRE TCC?
No. Your existing FIRE Transmitter Control Code (TCC) will not work in the new system. You must apply for a new, IRIS-specific TCC. The IRS notes that this application process can take up to 45 days, so it is best to apply early if you plan to file directly.
What happens if I file paper forms?
If your business files 10 or more information returns in a calendar year, you are legally required to file electronically. Paper filings are no longer accepted for most businesses, and sending them can result in strict penalties.
Do I need to file through IRIS?
Yes. The IRS will decommission the File Information Returns Electronically System (FIRE) on December 31st, 2026. This means all information returns will need to be filed through the new Information Returns Intake System (IRIS) for tax year 2026 (Filed in early 2027).
Stay Compliant and Stress-Free with eFileMyForms
Filing taxes shouldn’t give you a headache. Keeping up with IRS technology updates, separating name fields, and applying for new transmitter codes takes you away from what you do best—running your business.
That is where we step in. eFileMyForms provides everything you need to eFile, print, and mail your tax documents without the hassle. We handle the heavy lifting of compliance so you can focus on your day-to-day operations.
We are proud to announce that eFileMyForms is fully IRIS compliant beginning with tax year 2026 returns (which are filed in early 2027). We want to reassure our customers that they do not need to do anything differently. Our platform handles all the new XML formatting, name separations, and IRS connections automatically behind the scenes.
For those without a tax reporting solution, there will be major workflow changes and technical hurdles to overcome. Don’t wait until the deadline to figure out your IRIS strategy. Create your free eFileMyForms account today and discover the simplest way to stay compliant and on schedule.