The IRS has recently announced a significant change affecting all users of the Filing Information Returns Electronically (FIRE) system. Legacy TCCS (Transmitter Control Codes) are now obsolete. This update impacts a wide range of entities including any organization that is filing directly with the IRS as part of their yearly information reporting workflow.
Overview of the FIRE System and IR TCC Application
The FIRE system is an integral part of the tax filing process for filing all types of 1099 forms (including 1099-NEC, 1099-MISC, 1099-DIV, 1099-INT, and many more) following the Publication 1220 format. Within the past year, the IRS announced that it was transitioning from legacy TCCs to the Information Returns (IR) Application for TCC. This shift is not just a procedural change; it’s a necessary step to help with transitioning to newer IRS systems that are more secure and have more functionality.
Impact of Not Completing the IR TCC Application
Users that haven’t completed their IR TCC application are now in a bind as all legacy TCCs are now invalid. This means users with older TCCs cannot currently file with FIRE. Users attempting to file with an outdated TCC will encounter the error message: ‘Information provided is not correct’. The IRS goes on to say that their helpdesks are “experiencing very high call volumes and cannot provide additional information.”
The IRS goes on to recommend the following workarounds:
- Work with a 1099 software provider to complete the filing on their behalf.
- Apply for a 1099 extension using paper forms, if your form type allows it.
- Explore the option to request a waiver from electronic filing requirements.
Step-by-Step Guide to Completing the IR Application for TCC
- Identity Verification: Start by validating your identity through ID.me, the IRS’s authorized Credential Service Provider.
- Log into the IR Application Portal: Visit IRS.gov and access the IR Application for TCC.
- Online Tutorials: After logging in, refer to the ‘Online Tutorials’ tab for detailed instructions on how to add responsible officials, etc.
- Complete the Application: Ensure all information is accurate and submit your application.
- Application Status: Keep track of your application status, ensuring it reaches ‘Completed’.
Verification Process for Completed IR Applications
Once your IR-TCC application is complete, verify that it’s in ‘completed’ status and a TCC has been assigned. When logging into FIRE, it’s critical to enter your Employer Identification Number (EIN), new TCC, and legal business name exactly as they appear on your application.
Legacy TCC to IR-TCC FAQs
What Happens If I Don’t Transition from a Legacy TCC to an IR TCC in the FIRE System?
You won’t be able to file information returns on the IRS.gov FIRE website. A new IR-TCC is REQUIRED to e-file.
How Do I Complete the IR TCC Application Process for the FIRE System?
The IRS recommends completing the IR TCC application via their e-Services portal. Unfortunately, there is no IRS helpdesk support for this and the turnaround time for activating new TCCs is somewhat long.
How Long Does It Take to Get a New TCC After Applying?
Current estimates put the turnaround time at 1-2 weeks (depending on volume).
Can I Use My Old Legacy TCC for Any Purpose After the Transition?
Legacy TCCs have been completely dropped. It’s unclear if the IR-TCC process will reuse existing TCCs that have expired once the application is approved, but during the transition period you will be unable to do anything online with these TCCs.
What Should I Do If I Encounter Errors During the IR TCC Application Process?
The only option during this transition period is to try to debug this yourself or reach out to a 1099 filing professional.
Additional Resources and Help
For more information, make sure to periodically visit the Filing Information Returns Electronically (FIRE) ‘What’s New’ section of their website and ensure you are enrolled in the QuickAlerts program. Given the high call volumes at the IRS help desk, we highly recommend contacting a 1099 filing expert for next steps.
The invalidation of legacy TCCs and the transition to the IR TCC application is putting many FIRE users in a tough situation. Prompt action is required to ensure compliance and avoid filing disruptions. Ultimately, the simplest solution for many filers will be to file through a 3rd party provider.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.