Navigating New IRS Requirements for 1099 Prep Common FAQs
This FAQ comprises common questions from the recent 1099 prep webinar AppFolio hosted with Balanced Asset Solutions. Major changes to the filing requirements for 2023 information returns have been handed down by the IRS. The purpose of the webinar was to spread awareness of the IRS’ new requirements, help you understand how they impact you, and provide guidance on how to prepare.
The IRIS portal is the new system being launched by the IRS this year in an effort to modernize the e-filing experience, allowing for 1099s to be submitted directly in the portal, or uploaded via CSV file.
The FIRE system is the legacy program used by the IRS to accept electronically filed 1099 returns via text files. The IRS has stated that they will be discontinuing support for the FIRE system, but it will remain open at least through the 2023 tax year.
The IRS recommends using IRIS as it provides a better user experience and will eventually be the only way to file electronically since the FIRE system will be discontinued. AppFolio will support both IRIS and FIRE files for the 2023 Tax Year.
A TCC (Transmitter Control Code) is a 5-digit code that identifies the business transmitting electronic returns, and is required for both the IRIS and FIRE systems.
When applying for an IRIS TCC, you can apply for: your business only (issuer) or your business and others (transmitter). Each person you list as an authorized user must have an ID.me account.
Both systems require a unique TCC for electronic filing. These TCC codes must be applied for separately and are not interchangeable.
If you obtained a FIRE TCC prior to September 26, 2021, you will need to apply for a new TCC code. If you received a FIRE TCC code after this date or applied for an extension to continue using your old code by August 1st, 2023, you will be able to use your FIRE code to file for Tax Year 2023, but keep in mind that once the FIRE system is discontinued you will need a new unique TCC to use the new IRIS system.
This is a requirement by the IRS to validate your identity. After registering as an individual on ID.me, you will then need to complete a TCC application to associate your personal information with the business you are filing for.
The team at AppFolio is working diligently to add support for the new IRIS files and anticipates this being completed before the end of the year.
No, you only need one TCC. Each payer or recipient can be listed with their own TIN. When applying for your TCC, make sure that you apply as both an Issuer and a Transmitter.
- Issuer: A business that will only transmit information returns for the company listed on the application.
- Transmitter: A third-party business that will transmit information returns on behalf of their own company and/or other businesses not listed on the application.
You do not need to input the IRIS TCC code within AppFolio in order to generate IRIS files. The existing TCC code field in your company settings is required in order to generate a FIRE file, but this same requirement does not apply to IRIS files.
Yes, a Copy B 1099 form should be sent to every recipient. AppFolio allows you to generate Copy B forms for 1099-MISCs (Owners) & 1099-NECs (Vendors). Copy B forms must be sent via postal mail unless you’ve previously received consent to deliver them electronically.
AppFolio allows you to share an electronic consent form directly to the Owner Portal. This allows Owners to choose their preferred delivery method: Electronic and paper (AppFolio default) Electronic Only, or Paper Only.
Electronic consent is not required for you to file electronically with the IRS on your Owners’ behalf.
You will need to contact the 3rd party provider to confirm if they will be able to file on your behalf under the new changes.
