Late in June the Internal Revenue Service Electronic Tax Administration Advisory Committee (ETAAC) released its recommendations to Congress and the IRS regarding improving the IRS and how it handles filing matters. These recommendations are often followed, if not in the current year than in those that follow. Thus, it behooves those of you in Accounts Payable/Tax or as an independent CPA to stay on top of what the trends portended by guidance such as those issued by ETAAC. 

To that end the IRS will likely be looking at two major changes in the near future, and as follows:

1. Accelerated filing deadlines for virtually all 1099's to match those of the Form 1099-NEC. Under IRC Code Section 6071 (current-law) most information returns (if e-filed) don't have to be filed until March 31st of the year following the calendar year for which it pertains. ETAAC is now recommending that those deadlines be moved up to January 31st (citing in particular the 1099-K and 1099-R).

There are several reasons why but perhaps the most salient is in cutting down on fraud. This would have a number of follow-on effects of course. For one it will make your 1099 Year-End filing prep season a bit more frenetic - as you will want to have most of your checks/review/filing prep process completed by December at the latest. But as challenging as that may sound one potential benefit would be in enabling the IRS to get information to the states on a more timely basis. This could then cut down or even reverse the current exodus from the Federal/State Combined Filing Program (otherwise meant to make your 1099 reporting job easier vis-a-vis state filing).

2. Make the recently rolled out IRIS (Information Returns Intake System) the only system for e-filing information returns like 1099's and the W-2. The history of e-filing goes back to 1986 when the IRS established the FIRE (Filing Information Returns Electronically) system for bulk e-filing of information returns. Then, in 2010 the Affordable Care Act became law. AIR (Affordable Care Act Information Returns) system was created to deal with the reporting requirements under that law. Then, and most recently we had IRIS rolled out (ostensibly to target lower-volume information reporters).

The obvious problem here is that these multiple systems all require their own filing process. Most importantly is the convoluted and individualized registration process for each (and the need for separate Transmitter Control Codes). There is also the fact that you have to align your information with the three different systems and three different sets of filing requirements. To those very big and burdensome compliance and reporting issues ETAAC is proposing that IRIS become the single-point location of all electronic information return reporting.

Obviously, these would be huge changes. But the fact they are now not just being discussed behind closed doors but openly promoted by ETAAC is a strong signal that change is coming. Our subscribers will of course be updated as new information comes to light. So stay tuned in and be ready for the possibility of major changes to how you file your 1099s each year.