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
