For decades, the IRS FIRE system (Filing Information Returns Electronically) has been the backbone of 1099 and other information return filings. But starting in 2027, FIRE will be officially retired and replaced with the new Information Returns Intake System (IRIS).
At first glance, this may seem like just another system upgrade. But make no mistake—this is one of the most significant changes to information reporting in decades. The shift from FIRE to IRIS impacts how your data is structured, transmitted, validated, and corrected. For most organizations, this means rethinking processes from the ground up.
Why Is the IRS Making This Change?
The FIRE system was launched in the 1980s. While revolutionary at the time, it has reached its limits:
- Outdated technology: Built on mainframe architecture that can’t keep pace with modern security standards.
- Delayed feedback: FIRE filers often waited months to discover errors through B-Notices or CP2100s.
- Limited integration: The old system couldn’t connect smoothly with state systems or modern APIs.
IRIS was built to solve these problems, offering:
- Real-time validation – Catch errors instantly instead of months later.
- Modern APIs – Direct connections for large filers (100+ returns).
- Stronger security – Meeting today’s cybersecurity standards.
- Year-round testing – No more limited windows to validate files.
In short, IRIS is designed to be future-ready—but it requires businesses to change how they file.
Key Transition Timeline
- 2025–2026: Dual filing. Businesses can use FIRE or IRIS.
- December 31, 2026: FIRE is officially retired.
- 2027 filings (Tax Year 2026): IRIS-only compliance.
That means you have just one more filing season (2025 tax year) to test, prepare, and adapt.
What’s Different About IRIS?
This isn’t just a new upload site—it’s a complete overhaul. Some of the biggest changes include:
- File Format
- FIRE: Legacy 1220 flat file (ASCII).
- IRIS: XML/JSON schemas—larger, more complex, and more detailed.
- Transmission Method
- FIRE: Manual uploads to the IRS portal.
- IRIS: Web portal for small filers (<100 returns), direct API (A2A) for high-volume filers.
- Validation
- FIRE: Errors discovered months later.
- IRIS: Real-time checks for TIN mismatches, formatting, and business logic.
- Error Correction
- FIRE: Entire files needed resubmission.
- IRIS: Targeted corrections per record.
- Name/TIN Fields
- FIRE: Combined name fields allowed.
- IRIS: Strict separation of first, middle, last, and business names—essential for accurate TIN matching.
- Dual Format Management
- While the IRS moves to IRIS, many states still require FIRE formats. Businesses may need to file in both formats, doubling complexity.
Why This Matters for Your Internal Processes
Switching from FIRE to IRIS isn’t just a technology change—it’s a workflow change.
- Data prep is different: Name fields, file sizes, and schemas must be updated.
- Your software must adapt: Legacy systems designed for 1220 flat files won’t automatically handle XML.
- Credentialing changes: New TCCs are required depending on how you file (portal vs. API).
- Dual reporting complexity: You may need to file one way with the IRS and another way with states.
In other words, this transition touches every step of the filing process—from how you collect vendor information to how your systems generate files and correct errors.
The IRS Is Retiring FIRE: What You Need to Know About the Move to IRIS
The IRS is making one of the biggest changes to information return filing in decades. After years of running on the legacy FIRE system, the agency is replacing it with a new platform called IRIS (Information Returns Intake System).
This isn’t just a system swap—it’s a change that will alter how businesses collect, prepare, and file their 1099s and other information returns.
If your team isn’t ready, this transition could bring real risks to compliance.
Why It’s Happening
FIRE has been around since the 1980s. It did the job for decades, but it’s showing its age. The IRS has outgrown it, and businesses have too. FIRE doesn’t deliver real-time feedback, can’t integrate easily with modern systems, and relies on outdated formats.
IRIS is designed to solve these gaps by offering:
- Immediate error checks so mistakes are flagged before your filing is submitted.
- Modern file formats and APIs that support automation and integrations.
- Year-round testing instead of limited windows.
- Stronger security controls to match today’s standards.
The bottom line: the IRS wants a future-proof filing system, and IRIS is the answer.
Key Transition Dates
- 2025–2026: Businesses can file using either FIRE or IRIS.
- December 31, 2026: FIRE is permanently retired.
- 2027 filings (covering 2026 tax year): IRIS becomes mandatory.
That gives organizations one last “practice season” before the old system disappears.
What Changes for Your Business
Here’s where things get real. The shift to IRIS means:
- Data formatting will be stricter – Names must be separated (first, last, business), not lumped into one field.
- File preparation gets more complex – XML schemas are larger and more detailed than the old flat-file format.
- How you file depends on volume – Small filers (<100 returns) can use the IRS portal, but high-volume filers must move to direct system connections (API/A2A).
- States aren’t aligned (yet) – The IRS is moving to IRIS, but most states still rely on FIRE, which means many businesses will juggle two different formats.
None of this is “plug and play.” It requires adjustments to your processes and, in many cases, your technology stack.
The Risk of Waiting
A recent webinar poll showed that most businesses haven’t even started preparing for IRIS. That’s concerning.
- If you wait until the final season, you’ll be scrambling to reformat data, apply for new IRS credentials, and troubleshoot errors under pressure.
- If your software or service provider isn’t ready, you could face rejected filings—or worse, penalties for noncompliance.
This is why acting early is critical.
Why the Right Provider Matters
For most businesses, the question isn’t “Should we care about XML schemas and API connections?”—it’s “Do we have a partner that handles this complexity for us?”
A capable provider should:
- Support both FIRE and IRIS during the transition.
- Manage IRS credentials and API integrations on your behalf.
- Handle federal and state filing differences automatically.
- Provide built-in error checking so you don’t waste time chasing mismatches.
With the right solution, the transition isn’t a burden—it’s an opportunity to modernize your compliance process and avoid last-minute headaches.