IRS IRIS vs FIRE: Essential Insights

As tax rules continue to evolve, many businesses, CPAs, payroll providers, nonprofits, and individual filers are asking how they should file information returns electronically. The Internal Revenue Service offers two systems: the Information Returns Intake System (IRIS) and the Filing Information Returns Electronically (FIRE) system. Understanding their differences is essential for staying compliant and avoiding costly mistakes.

The electronic filing threshold remains low for tax years 2025 and beyond—just 10 returns. This means that even small businesses issuing a handful of Forms 1099 or W-2G may now be electronically required to file. The choice between the modern IRIS platform and the legacy FIRE system affects more than convenience; it impacts compliance, penalties, and overall efficiency.

Because FIRE will be retired in 2027, organizations must consider whether to start applying for an IRIS transmitter control code (TCC) and prepare for the transition. This guide will walk you through the differences, filing requirements, penalties, and upcoming deadlines so you can make informed decisions for your business or clients.

Understanding the Basics

Before deciding between IRIS and FIRE, it is essential to understand what each system is designed to do. Both serve the purpose of filing information returns electronically, but they differ in features, usability, and long-term availability.

1. What Is the IRS IRIS System?

The Information Returns Intake System is the IRS’s modern platform built to simplify electronic filing. It offers two main options:

• IRIS Taxpayer Portal: This free, web-based system allows filers to submit up to 100 returns simultaneously. It accepts both manual entry and CSV upload, and filers can download recipient copies of Forms 1099 and W-2G to distribute. No third-party software is required, making it accessible to small businesses and nonprofits.
  
  
• IRIS Application to Application (A2A): This channel is designed for higher-volume filers who need automation and integration. It uses an API connection that lets businesses or service providers electronically file large data sets, process up to 100 MB at a time, and walk through compliance in real time.

Filers must apply for a transmitter control code (TCC) to use IRIS, and authentication is handled through ID.me, which has a locked padlock icon showing a secure login.

2. What Is the IRS FIRE System?

The Filing Information Returns Electronic System has been used for decades as the standard method for submitting forms such as 1099, 5498, 3921, 3922, and W-2G. It requires specialized file formatting and often depends on third-party software to prepare documents correctly. Unlike IRIS, the FIRE system does not provide real-time validation; processing can take up to two business days.

Although still operational, FIRE will be retired in January 2027. After that time, all businesses and tax professionals must use the Information Returns Intake System. Those relying on FIRE should begin preparing for the transition to avoid last-minute challenges.

The 10-Return Electronic Filing Rule

Beginning with tax year 2023 returns, the IRS reduced the electronic filing threshold from 250 returns to only 10. This change significantly expands the number of businesses and organizations required to file their information returns electronically. If you file 10 or more returns in a calendar year, you must submit them through an approved IRS system.

The types of filings that count toward the 10-return threshold include the following:

• Information returns filed through the Information Returns Intake System are always included in the total count toward the threshold.
  
  
• Submissions made through the FIRE system are considered part of the total and apply to all platform users.
  
  
• Affordable Care Act information returns submitted through the AIR system are added to the filer’s overall return count.
  
  
• Forms W-2 submitted to the Social Security Administration also count toward the 10-return requirement.

This rule means that even small businesses that pay just 10 contractors or employees must electronically file Forms 1099 or W-2G. For many filers, electronic submission is no longer an optional convenience but a mandatory compliance step.

Comparing IRIS vs. FIRE

Businesses and tax professionals must understand how the IRS, IRIS, and FIRE systems compare. Each system has different capabilities, supported forms, and technical requirements that can affect where to electronically file information returns.

System Capabilities

• The IRIS Taxpayer Portal allows up to 100 returns per batch, while IRIS A2A accepts files up to 100MB. The FIRE system can handle up to one million records per submission, making it useful for large volumes.
  
  
• The IRIS Taxpayer Portal provides manual entry and CSV upload options. IRIS A2A supports API and XML integration for automated processes. In contrast, the FIRE system only accepts specialized file formatting.
  
  
• The IRIS Taxpayer Portal delivers immediate validation of submissions, and IRIS A2A also provides real-time feedback. The FIRE system may take up to two business days to process, which can delay corrections.
  
  
• The IRIS Taxpayer Portal and IRIS A2A are free, although IRIS A2A requires system integration. The FIRE system is technically free, but most users must pay for third-party software to prepare and transmit files.
  
  
• The IRIS Taxpayer Portal requires only a web browser, while IRIS A2A requires custom development or integration with business systems. The FIRE system requires specialized software to create and transmit files according to IRS standards.

Supported Forms

• The Information Returns Intake System supports many forms, including Forms 1099, 5498, and W-2G. The IRS has stated that more forms will be added to IRIS before the FIRE system is retired in 2027.
  
  
• The FIRE system supports Forms 1042-S, 1097, 1098, the 1099 series, 3921, 3922, 5498, 8027, 8955-SSA, and W-2G. Many organizations still rely on FIRE for forms that are not yet supported in IRIS.

Technical Requirements

• Users only need a modern web browser and valid ID.me credentials to access the IRIS Taxpayer Portal. A locked padlock icon confirms secure login. For IRIS A2A, businesses must integrate their systems with the IRS application programming interface.
  
  
• Publication 1220 requires filers to use FIRE to prepare ASCII-format files. The system requires TLS 1.2 security protocols, and every filer must have a valid transmitter control code (TCC). In practice, many filers rely on third-party software to complete these technical steps correctly.

Choosing the Right System

Because every business has different filing needs, the choice between IRIS and FIRE depends on factors such as filing volume, the types of forms required, and long-term transition planning.

When to Use the IRIS Taxpayer Portal

• Businesses that file fewer than 100 information returns at a time may find the Taxpayer Portal the most efficient solution.
  
  
• Organizations that want a no-cost method to file information returns electronically can benefit because the portal is free.
  
  
• Nonprofits and small businesses that issue Forms 1099 or W-2G but do not want to invest in third-party software often find the Taxpayer Portal the most practical option.

When to Use IRIS A2A

• Certified public accountants and tax professionals preparing returns for multiple clients typically choose IRIS A2A because it supports large filings.
  
  
• Payroll providers and financial institutions often rely on IRIS A2A since it integrates directly with existing systems, saving time and reducing the need for manual input.
  
  
• High-volume filers benefit from A2A's real-time validation, which allows them to review errors immediately and avoid rejected submissions.

When FIRE May Still Be Needed

• Businesses filing Form 1042-S must continue using the FIRE system because IRIS does not yet support this form.
  
  
• Organizations with established FIRE workflows and significant software investments may decide to continue using FIRE until its retirement.
  
  
• Filers managing extremely high volumes, such as millions of records in a single submission, may still prefer FIRE in the short term, since its batch size remains larger than IRIS.

Filing Deadlines and Application Process

Meeting deadlines is a critical part of compliance. Different forms have different due dates; missing one can lead to penalties. Preparing early ensures businesses and organizations can apply for a transmitter control code and electronically file without last-minute stress.

Critical Filing Deadlines for 2025–2026

• Form 1099-NEC must be electronically filed with the IRS and delivered to recipients by January 31, 2026, because this form reports nonemployee compensation and is time-sensitive.
  
  
• Most Forms 1099, such as 1099-INT and 1099-DIV, are due to the IRS by March 31, 2026, while recipient copies must be provided by January 31, 2026, to ensure individuals have the information needed to complete their tax returns.
  
  
• Forms 1099-B and 1099-S are due to the IRS by March 31, 2026, but recipient copies must be sent by February 15, 2026, because these forms relate to investment and real estate transactions that often require additional reporting time.
  
  
• Form 5498 must be filed with the IRS by May 31, 2026, and copies must be sent to account holders according to specific form instructions, since these returns pertain to IRA contributions and account balances.
  
  
• Form W-2G must be filed with the IRS by March 31, 2026, and copies must be sent to recipients by January 31, 2026, because gambling winnings are taxable and must be reported promptly.

Applying for a Transmitter Control Code (TCC)

• Every filer must apply for an IRIS TCC to file through the Information Returns Intake System. This requires providing business details such as the Employer Identification Number, legal name, and information about the responsible official.
  
  
• The application process for IRIS requires authentication through ID.me, and the locked padlock icon confirms that the login and personal information are secure.
  
  
• FIRE also requires a TCC, but applicants must be prepared to comply with Publication 1220 specifications and use properly formatted ASCII files. This often involves purchasing or maintaining third-party software.
  
  
• The IRS recommends submitting all applications by November 1, 2024, because approval may take up to 45 days. Late applications may not be processed in time for the 2025 filing season.

Penalties and Compliance Requirements

The IRS enforces strict penalty rules to ensure the timely and accurate filing of information returns. Even minor errors or delays can add up to significant costs for businesses.

Penalty Schedule for 2025

• A return that is filed up to 30 days late carries a penalty of $60 per return, which can quickly increase for businesses with dozens of forms.
  
  
• A return filed between 31 days late and August 1 results in a penalty of $130 per return, raising the financial burden for organizations that miss midyear deadlines.
  
  
• A return filed after August 1 or never filed at all triggers a penalty of $330 per return, which is often considered the most severe penalty for standard errors.
  
  
• A return filed intentionally disregarding the rules results in a penalty of $660 per return. There is no maximum cap on these penalties, making them especially costly for large filers.

Compliance Requirements

• Any business that files 10 or more returns must electronically file using an approved IRS system. Failure to comply with this requirement exposes the filer to penalties and late fees.
  
  
• A transmitter control code must be used at least once every three years to remain valid. If the code expires, the filer must reapply and cannot reactivate the expired TCC.
  
  
• The IRS automatically rejects files submitted without a valid TCC. Until corrected, these rejections are treated as unfiled returns, and penalties are calculated based on the original due date.

Options for Penalty Relief

• Filers may request reasonable cause relief if they can demonstrate that events beyond their control prevented timely filing, and they acted with ordinary business care before and after the issue.
  
  
• Businesses that cannot file electronically due to technical or financial difficulties may apply for a waiver using Form 8508. This waiver determines if compliance would cause undue hardship or if a disaster makes electronic filing impossible.

Practical Examples and Case Studies

Looking at real-world scenarios helps illustrate how the rules apply to different organizations and why choosing the right system matters.

• A small marketing agency that issues 30 Forms 1099-NEC to contractors must electronically file because it exceeds the 10-return threshold. This agency can use the IRIS Taxpayer Portal since it supports up to 100 returns per batch and does not require paid software.
  
  
• A regional CPA firm filing more than 2,000 returns for clients each year should use IRIS A2A. This option integrates with professional software and allows the firm to review errors in real time, ensuring that returns are processed without costly delays.
  
  
• A community bank that files thousands of Forms 1099-INT and 1099-DIV and a smaller number of Forms 1042-S may need to rely on both systems temporarily. The bank can continue using the FIRE system for 1042-S while shifting other returns to IRIS A2A before the 2027 retirement.
  
  
• A nonprofit educational institution with 150 Forms 1099-DIV and 1099-INT can use the IRIS Taxpayer Portal. This solution is free, easy to log into, and avoids the need to pay for third-party software, which is ideal for organizations with limited budgets.
  
  
• A gig economy platform that issues more than 50,000 Forms 1099-K annually must use IRIS A2A with customized integration. This setup allows the business to electronically file at scale, maintain compliance, and prepare for the end of the FIRE system.

Troubleshooting Common Issues

Even with careful preparation, businesses may encounter technical or process-related problems when filing information returns electronically. Understanding common issues helps filers resolve them quickly and avoid delays.

IRIS Taxpayer Portal Issues

• If a CSV file upload fails or displays no data, the problem is often due to incorrect formatting. Filers should ensure their forms follow the IRS template and are saved in genuine CSV format rather than as an Excel file renamed with a CSV extension.
  
  
• If forms remain stuck in “Unsubmitted” status, the most common cause is incomplete fields or validation errors. Filers should review all required fields, confirm that taxpayer identification numbers are entered correctly, and verify that issuer details match the registered transmitter control code.
  
  
• If PDF downloads of recipient forms do not work, the issue may be linked to security settings. Businesses should confirm that their firewalls allow downloads from the IRIS domain and test the process in a different browser or incognito mode.

FIRE System Issues

• If a file is rejected due to formatting errors, filers should review Publication 1220 and check each record layout carefully. Even minor mistakes in spacing or character limits can cause rejections. Testing smaller sample files before submitting large batches can prevent repeated errors.
  
  
• If a transmitter control code is not recognized, the issue may stem from the activation period. FIRE requires 48 hours after approval before a TCC can be used, so businesses should wait and then verify that the EIN matches the TCC application exactly.
  
  
• If a file exceeds the system’s size limits, the filter must divide the records into smaller batches. The IRS recommends splitting submissions into multiple files or compressing them using approved software such as WinZip.

TCC and ID.me Problems

• If ID.me identity verification fails, the most common cause is outdated or unclear documents. Applicants should use current documents that exactly match business registration records. If the problem continues, it is recommended that they contact ID.me support directly.
  
  
• If TCC applications take longer than 45 days, filers should check their online application summary for updates. If delays persist, they can call the IRS Technical Services Operation with their application reference number for assistance.

Preparing for the 2027 Transition

The IRS has confirmed that the FIRE system will be retired in January 2027. This change affects every filer, from small businesses to large institutions, and requires careful transition planning.

• The IRS will stop accepting new submissions through the FIRE system after December 31, 2026. Beginning January 2027, all information returns must be filed through the Information Returns Intake System.
  
  
• Existing FIRE transmitter control codes will become invalid in 2027. Before that time, every filer must apply for and maintain a valid IRIS TCC to continue filing information returns electronically.
  
  
• Early adoption of IRIS allows businesses to become familiar with the system and provide feedback as the IRS continues to expand its features. This preparation helps reduce errors and ensures a smoother transition when FIRE is shut down.
  
  
• Organizations with large filing volumes should plan for a transition period of at least 12 to 18 months. This time allows testing, system integration, and staff training before the deadline.
  
  
• Businesses that continue using FIRE until 2026 should still test IRIS in parallel. This dual approach ensures that any technical or compliance issues can be identified before the transition becomes mandatory.

Next Steps and Action Plan

Businesses and tax professionals can prepare for upcoming filing seasons by following a structured plan. Taking action early helps avoid penalties and ensures compliance with IRS requirements.

Immediate Actions (Next 30 Days)

• Every filer should count the total number of information returns they submit yearly to determine whether they meet the 10-return electronic filing threshold.
  
  
• Filers should identify which forms they use most often, such as Forms 1099 or W-2G, and confirm whether IRIS supports them or still requires FIRE.
  
  
• Organizations should review their current transmitter control code status and decide whether to apply for an IRIS TTCC before the filing season.

Short-Term Planning (Next 90 Days)

• New electronic filers should decide whether to use the IRIS Taxpayer Portal or IRIS A2A based on their expected filing volume and technical capabilities.
  
  
• Businesses should apply for a TCC as soon as possible, ideally before the November 1 deadline, to ensure processing in time for the 2025 season.
  
  
• Data should be prepared in advance by cleaning records, checking taxpayer identification numbers, and formatting files according to IRS specifications.

Long-Term Strategy (6–18 Months)

• Current FIRE users should develop a clear transition timeline that moves filings to IRIS gradually while maintaining access to FIRE for supported forms.
  
  
• Businesses with large filing volumes should plan system integration projects, train staff on IRIS, and establish backup processes to ensure business continuity.
  
  
• Organizations should regularly review IRS updates since system features, supported forms, and deadlines may change before FIRE's retirement in 2027.

Frequently Asked Questions

Why should businesses understand IRS IRIS vs. FIRE?

Businesses must compare IRS IRIS vs. FIRE because each system has different requirements and timelines. The Information Returns Intake System was created to simplify how filers file forms 1099, W-2G, and other returns electronically. The fire system still works, but it will be retired in 2027. Choosing the right platform now helps organizations prepare, avoid penalties, and reduce the cost of filing information returns electronically over time.

How does the transmitter control code TCC work?

The Transmitter Control Code (TCC) is required before filers can start submitting information returns electronically. To receive a TCC, applicants must log into the IRS portal with ID.me credentials, which display a locked padlock icon to confirm security. Applying requires providing legal business information and naming a responsible official. Without a valid TCC, a file is considered incomplete, and the IRS will not accept the filing information.

What role does third-party software play in filing information returns?

Third-party software is often needed for the fire system because files must be prepared in ASCII format according to Publication 1220. Businesses using IRIS do not need extra tools to electronically file through the Taxpayer Portal since it allows manual entry and CSV uploads. However, large filers may still rely on outside programs when completing forms on behalf of multiple clients and preparing to transmit high volumes of returns.

Which forms can be filed through the information returns intake system?

The Information Returns Intake System supports a wide range of forms, including many 1099 forms, Form W-2G, and several 5498 filings. These forms can be completed, reviewed, and submitted directly online. The FIRE system continues to handle other filings, such as Form 1042-S, until it is retired. Filers should review the IRS list each year because the forms supported by IRIS expand as system updates are rolled out.

What happens if I miss the deadline for electronically filing?

If a filer does not electronically file information returns on time, the IRS will consider the submission late and apply penalties. Penalties range from $60 per return for short delays to $330 for filings made after August 1. Intentional disregard results in a $660 penalty per return. Because businesses must also mail recipient copies, preparing early and reviewing deadlines carefully is essential to avoid unnecessary costs.