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IRS Advisory Council Highlights Major Changes for W-2 and 1099 Filers

Information return filing is evolving quickly. In January 2026 IRSAC Public Report, the IRS Advisory Council (IRSAC), an external advisory group that advises the IRS, highlighted several developments that could affect employers, payers, and service providers that file Forms W-2 and 1099.

Here are the IRSAC themes most likely to matter for day-to-day filing, along with practical steps you can take now and how Zenwork Tax1099 helps customers stay on track.

 

1) The IRS is moving from FIRE to IRIS, and 2026 is a key transition year

The IRSAC report points to the IRS’s continued shift away from the legacy FIRE system and toward the IRIS platform, as FIRE is expected to be phased out in 2026. IRSAC encouraged the IRS to provide clearer guidance and training for filers as this transition continues.

Why this matters to you: Even if you have e-filed for years, the filing experience may change, especially around setup, submission requirements, and how errors are reported and resolved.

How Tax1099 helps: Our platform is built for bulk filing and change management. We help customers prepare and file at scale with clear tracking, filing confirmations, and straightforward visibility into what needs attention, so you are not relying on last-minute troubleshooting at the worst possible time of year.

Not to forget, Tax1099 has already migrated to the IRIS so the transition will not affect Tax1099 users. This means our users enjoy a seamless filing experience with no extra transition costs or technical headaches (compared to other software that are still relying on FIRE). This head start will give Tax1099 users stability, predictable platform performance, an established support and knowledge base, and no downtime risks that come with major system migrations.

 

2) Data changes can increase TIN/name mismatch risk leading to potential penalties

IRSAC noted that as filers adapt to new IRS formats and requirements (including how names are handled), the risk of TIN/name mismatches may increase. IRSAC also raised concerns about how these changes could lead to additional compliance burdens and recommended considering penalty relief in certain transition-related mismatch scenarios.

Why this matters to you: Mismatch issues tend to show up later through rejections, corrections, or IRS notices, and they can quickly turn into time-consuming clean-up work and start a ripple effect in IRS penalties.

How Tax1099 helps: We emphasize “clean filing” practices that reduce avoidable rework:

  • Run pre-filing checks to catch common issues before submission
  • Improve payee data consistency to reduce preventable mismatches
  • Resolve exceptions quickly so you can fix what is needed without slowing down an entire filing run

 

3) Peak-season readiness depends on timing, system readiness, and last-minute changes

IRSAC recommended that IRS filing systems be available as early as January 2 and that filing specifications be released as early as practicable, in part because many filing timelines depend on IRS readiness, including state programs and vendors.

Why this matters to you: When changes or delays happen late in January, filing teams get squeezed. The last week of the month becomes a bottleneck, and “rush mode” increases the chance of errors.

How Tax1099 helps: The platform supports early readiness and smoother peak-season operations to:

  • Prepare and validate files earlier
  • Plan submissions in stages rather than a single all-at-once rush
  • Track filing status clearly so you can manage work instead of guessing

 

4) Draft Form W-9 changes could affect onboarding and TIN collection

IRSAC included a comment letter on the Draft Form W-9 (Rev. January 2026), cautioning that proposed changes could increase confusion, errors, and identity-theft risk if finalized. IRSAC also emphasized the importance of practical flexibility around EIN/SSN usage and clear certification language.

Why this matters to you: Payee onboarding is where filing accuracy starts. If W-9 requirements change, payee intake and substitute W-9 processes may need updates to keep data clean and reduce mismatch risk.

How Tax1099 helps: The platform supports payee onboarding and TIN collection practices that feed accurate W-2 and 1099 outcomes, including consistent capture of taxpayer name/TIN information and handling common edge cases (such as sole proprietors and disregarded entities).

Practical steps you can take now

  • Prepare for the IRIS transition: Confirm who owns filing credentials, set a testing timeline, and avoid waiting until late January.
  • Improve payee data quality: Clean names and TINs before filing season ramps up.
  • Build time buffers into your January plan: Validate early and reduce dependence on the last week of the month.
  • Review W-9 / onboarding workflows: Be ready to update substitute W-9 language if the IRS finalizes changes.

 

How Tax1099 can help you stay ahead

Tax1099 helps customers manage change and file at scale through bulk federal and state filing workflows, pre-filing validations, visibility into submission outcomes, and efficient correction support when exceptions arise.

If you are preparing for IRIS-related changes, higher e-filing volume, or increased mismatch risk, contact our Tax1099 support representative to review your readiness plan for the Tax Year 2025 filing season.