E-file Final Regulations Issued for Businesses in Tax Year 2023

The Department of the Treasury and the Internal Revenue Service (IRS) recently issued final regulations that will require persons (including corporations, partnerships, etc.) to e-file tax year 2023 information returns, starting in 2024.  The IRS reports nearly 4 billion information returns are currently received annually, with an expected increase to nearly 5 billion by 2028. In 2021, approximately 82% of all corporate income tax returns were e-filed while almost 90% of partnership tax returns were e-filed. As recent as 2019, the IRS received nearly 40 million paper information returns, even though approximately 99% of all information returns for that year were e-filed.  

Final regulations specifics include:

  • Reducing a 250-return threshold that was enacted in prior regulations to require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of the certain returns and other documents listed above that were not previously required to be e-filed
  • Requiring filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. .  Examples of forms encompassed by  includes all 1099 forms, Form 3921, Form 3922, Affordable Care Act forms (1094-B, 1094-C, 1095-B and 1095-C), Form 1042-S, W-2s, and several other information returns.
  • Eliminating the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year
  • Requiring partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return

As a result of the above changes to the existing regulations, the IRS anticipates an influx in 2024 e-filing. To ease the burden of increased traffic on the FIRE system, the IRS created a new, free, secure and accurate e-filing online portal, the Information Returns Intake System (IRIS)IRIS will be used by businesses as a means to file Form 1099 series information returns electronically. Noteworthy:  a current TCC will remain valid for use until August 1, 2023. After that date, any FIRE TCC that does not have a completed IR-TCC Application on file will be dropped and will not be available for e-file.  The IRS is projecting 45 days needed for processing the application.  E-filing businesses that currently use a FIRE TCC  must apply for a new IRIS TCC prior to submitting forms or requesting extensions in IRIS. 

IRIS allows users, of any business size, to do the following:

  • Directly prepare (create, edit and view) and file Forms 1099 series electronically, without software or a service provider
  • Download and print the recipient copy of Forms 1099 for distribution to payees
  • Maintain a record of completed, filed, and distributed Forms 1099
  • Perform basic validation of 1099 data before submission
  • File up to 100 forms per submission
  • Participate in the Combined Federal/State Filing Program (CF/SF)
  • Request automatic extensions; and 
  • File certain corrected information returns

To apply for the IRIS TCC, the following information is required:

  • Business Legal Name and employer identification number (EIN).
  • Business physical location and business mailing address.
  • Business structure (Corporation, LLC, Sole Proprietor etc.)
  • Business telephone number.
  • The form type(s) you’ll be filing electronically – Select ONLY the forms you know you’ll be filing electronically.
  • Authorized Users, with a Social Security number or Individual Taxpayer Identification Number, title, telephone number, and date of birth.

During the busy calendar year-end financial and income tax reporting season, SPS/GZ professionals assist our clients navigate what are typically complicated and burdensome tasks in the areas of tax form reporting. We are a full-service tax reporting and stock plan administration firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to business clients of all sizes. SPS/GZ team members create and e-file, various 1099s, including 1099-NEC, Forms 1042-S, 1098-T, Affordable Care Act tax forms, and Forms 3921 and 3922 on behalf of our business clients. Our complete and affordable solution allows 

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Contact us to learn how SPS/GZ can be your company’s trusted partner for stock plan administration and tax form reporting services.