We want to alert you to recent changes the IRS has made regarding filing informational returns (1099s, W-2s, 941s, etc.) that we believe will affect many 2023 forms. 

What has changed? 

In the past, informational returns were required to be filed electronically once you hit a 250-count threshold. However, starting January 1, 2024, the threshold has been reduced to 10. If you file 10 or more informational returns, you are now REQUIRED to file them electronically. This is MANDATORY, not optional.  

Possible Penalties

The penalties involved with non-compliance can be very burdensome. Depending on when the IRS figures out that the informational returns were not filed correctly, penalties can get up to $310 and even $630 for intentional disregard. These penalties are per form; for example, if you filed ten 1099s by paper, you could see a $3,100 penalty. From our reading, being released from these penalties will be nearly impossible.

How to proceed

In order to comply with these electronic filings, several accounts need to be created. You will begin with creating an account with the IRS through ID.me.  

• Filing of 1099s: an account must be created with the new IRS system IRIS (Information Returns Intake System), along with applying for a TCC (Transmitter Control Code). According to the IRS, applying for the TCC can take up to 45 days.  
• Filing of W-2s: an account must be created with the Social Security Administration.  
• Filing of payroll forms (941, 940, etc.): separate IRS-approved software must be purchased. There is currently no website for submitting these forms.

We know that this is a significant change, and we have the ability to handle these issues for you. Please do not hesitate to contact us with any questions.