Efiling 1099s

[Jim-from-Ohio]

2023 tax year is the first year that the IRS is offering their own free efiling of 1099s.  Has anyone signed up yet? I would like to try it for tax year 2023 but have not been able to sign up.  You need an IRIS Transmitter Control Code (TCC).  You need an ID.ME which I already have but could not get past the screen to receive the TCC.  Navigating the web pages takes you to a landing spot that look like from the day of DOS. Anyone else try this or want to give it a try and see if you can get it to work. link:

https://www.irs.gov/filing/e-file-forms-1099-with-iris

[rbynaker]

This was started just under a year ago so you could have signed up and filed 2022 1099s via IRIS (and currently that's all it does, despite there being 2023 1099 forms that you can download and/or order from the IRS right now, they don't have the IRIS schema defined for 2023 yet).  I discussed it with my clients late last year and all agreed not to be the guinea pigs for a brand new system.

The IRS had a session on IRIS at the Nationwide Tax Forum.  IMO the system is not ready for prime-time and not designed with tax professionals in mind.  With that said, they are starting with something small (because it was mandated by Congress) and making improvements as they go.  I think the long-term plan is to replace (or at the very least merge with) the current FIRE system.  The system will need to be significantly more robust before that can happen.

If you have clients who either prepare their own 1099s or use one of the online services, they may consider switching to IRIS for the TY2023 filing season.  If you can survive the registration process, it's geared towards small businesses (and IMO, that's a great place to start!)  Each employer will create their own account (tied to their EIN) and be able to enter/submit 1099s as well as print recipient copies.  If the employer is used to using a service that either does the recipient stuffing/mailing for them or even better has online download capability for recipients, IRIS is no match for that level of service.  It's a glorified typewriter that's supposedly generous enough to remember your entries from last year.

Tax professionals do have the ability to sign up as a transmitter for clients.  This is done via your existing eServices account.  The glitch I ran into was that I had to dig out my SS-4 letter because my business name had to match exactly what was on file for my EIN.  Once I got through the application process, it was approved within the week (I think 2-3 days).  I have signed up but not submitted anything.  My objective was to survive the registration process and then decide whether or not I want to use this in January.  If nothing else, I'll personally be the guinea pig and file a nominee 1099-INT for a joint-account holder.  The problem I see for tax professionals (and for large businesses) is that the upload files (fairly convenient if you are or have an Excel wizard around) are limited to 100 entries per file.  Also, preparers are limited to a fairly low number of clients.  I don't remember the number and can't find it online right now but my recollection is that the limit is a double-digit number.  So if you have 20 clients for whom you submit 1099s, no problem.  If you have 200 clients IRIS is not the solution for you (at least not yet).

Rick

[Just-Lisa-Now-]

I did the ID.ME thing and signed up for that IRIS account, I see it when I log into my EFIN account, I have no clue how it works or how to use it though, so I guess we'll see what kinda mood Im in come January if I want to hassle with it or if I'll go back to old school and just paper file everything as usual.....The IRS already sent me a boatload of paper forms that I ordered, so I know they're still accepting them!

The whole electronic thing may be easier for them on their end, but if its more hassle for me on my end...Im not doing it.

[rbynaker]

The impetus for IRIS was that Congress now requires electronic filing if this issuer files more than 10 information returns.

[PATAX]

I recently attended a tax webinar and the instructor I believe wasn't too impressed with that Iris system. I agree with Rick and Lisa and I don't plan on using that Iris system. I have been using AMS for years to print out the 1099 forms and having the clients mail them. AMS also offers electronic filing of these forms (and W2S) in partnership with NELCO,  who I believe is the third party administrator. That's what I plan on using and hopefully it works out. If anyone has used AMS/nelco to electronically file these forms in past then please let us know how it worked out. But like Lisa, I will also order the paper forms and envelopes from NELCO just in case there are issues. Hopefully IRS won't charge any penalties if someone has to paper file. It just amazes me that the IRS makes these mandates, and apparently do not consider the difficulties that taxpayers and tax professionals may encounter. You know the taxpayers that pay their salaries.

[Jim-from-Ohio]

once you hit ten of all type of information returns 2023 has an efile mandate.. still cannot get the FIRE TCC process submitted.. keeps asking me for a second contact person but I am the only one here. 

[rbynaker]

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@Jim-from-Ohio wrote:

once you hit 1099 information returns (1099s) 2023 has an efile mandate.. still cannot get the FIRE TCC process submitted.. keeps asking me for a second contact person but I am the only one here. 

---

If you're a sole proprietor you can make yourself the "second" contact.  In mine I have two "roles", 1 as Responsible Official and another as Contact.

If you're anything else I think they require a second person.

[Jim-from-Ohio]

Doing some more reading on this.. The e-file threshold no longer applies per form type, but rather filers that have a combined total of 10 or more information returns are required to electronically file all information returns.  so if a taxpayer has say nine w-2s to file and one 1099 they have to file all of those electronically. 

[PATAX]

@Jim-from-Ohio Jim apparently there are instances where you also have to count the 941 returns and the 940 return, even though both the 941 and 940 are not required to be e-filed. I'm not sure if this applies in certain circumstances or in all circumstances. . If you or anyone else can find anything on this then let us know. Thanks.

[DTNY07]

I have searched this and i can't seem to get a firm answer.  I don't prepare a lot of payroll.  As any client that has more than a few employees, uses a payroll company for that.   I don't have any client that has more than 10 W-2s.  If you combined all the clients that I do payroll for, then yes it is more than 10 employees.   I know it is for 1099s combined with W-2s.  Would have two in total as I do have two that have more than 10 in that case.  But, do I have to electronically file for all my clients as combined everything is over 10.  Or just for the two where the combined W-2s/1099s are over then.  Thanks in advance 

[IRonMaN]

Just for the two.

[DTNY07]

thanks for the info 

[IRonMaN]

You betcha!

[Taxes-by-Rocky]

With respect to the RO issue, if you are a corporation with only one RO you're dead in the water.  [And its not like you can really make up another RO for a corporation.]  IRS is well aware of the problem and (per them) they have been aware of the problem since last spring.

Can't make that one up!

Guess TCC and IRIS is off the list.....don't expect it to actually be functional for a few more years anyway.

[Taxes-by-Rocky]

From within ProSeries.....

>Tools>>Print & E-file W-2s and 1099s....

I couldn't argue with the price.  Certainly does not have all forms and I'm sure I'll learn the short-comings in due course.

@ProSeries:  Please add to the list Form 1099-OID.  Thanks.