What is IRIS?

The Affordable Care Act was signed into law March 23, 2010 and took effect in 2014. Since tax year 2015, the IRS has required businesses with 50 or more employees to file 1095-C forms and requires health insurance providers to prepare 1095-B forms. Data is collected through a system called AIR which stands for Affordable Care Act Information Returns.

Talk to any IRS agent who worked behind the scenes developing the 1095 AIR intake system and you can listen to their pride. The IRS fell in love with the 1095 forms and are modeling their new 1099 Information Returns Intake System or IRIS platform after the success of the 1095-B and 1095-C forms.

Here are changes that are coming:

Transmitter Control Code (TCC): You need to apply for a TCC number in order to file 1095 forms to the IRS. The application process takes about 45 days to complete and requires at least two responsible officials from the business to be on the application at all times. If one responsible official leaves that business, then the other responsible official can remove them from the application and add someone new. You have to submit a series of test files to complete the application process and become a transmitter of 1095 forms.

The new 1099 IRIS system will require the same steps. At least two responsible officials from that business will be on the TCC application at all times. If one responsible official leaves that business for whatever reason, then the other responsible official can remove them from the TCC application and add a new responsible official. Test files will be developed and required.

XML Schema: The IRS used for almost two decades a fixed-width file format discussed at length in Publication 1220. The IRS never liked the fixed-width file specifications because it limited how long a name, street address or city field could be. The current code looks something like the below: NATIONAL SOFTWARE INCORPORATED 1345 E CHANDLER BLVD SUITE 209 PHOENIX AZ85048 where the name is contrained by a single line of fixed length. Foreign address are often very long and extremely difficult to handle using the current system. The new XML code will look a lot like the 1095 XML schema where the address will look like this: 1345 East Chandler Blvd Suite 209 Phoenix AZ 85048 XML handles foreign addresses with ease. Descriptions that are found on Form 1099-A, B, C and 1099-S had to be truncated to fit the current file format. XML changes all of this.

XML Validation: One positive to creating XML is the opportunity to validate the XML generated against the schema provided to verify that each and every field is well formed and valid. Many software companies like 1099FIRE can easily validate XML schema before submitting to the IRS to make sure its acceptable.

TIN Matching: TIN matching verifies that the name used matches the taxpayer identification number. The IRS doesn't tell you what the correct TIN is; only whether the name/TIN combination provided matches the IRS records.

Very few clients who submit 1098, 1099, 3921, 3222, 5498 or W-2G forms give much attention to TIN matching. And why would they? The IRS has not pressed payers for valid taxpayer identification numbers of their recipients. Instead the IRS only requires that a payer submit a file without too many missing TINs. Very few payers know about or take advantage of the IRS TIN matching service.



Very few employers who submit 1095 forms don't know about TIN matching. Every employee record you submit along with their dependents is double checked through IRS TIN matching. The most common file status when submitting 1095 forms is Accepted With Errors with one or more of the following errors listed: 'PersonName' and 'SSN' in 'EmployeeInfoGrp' must match IRS database. or The Information Return 'IndividualName' and 'SSN' within 'IndividualGrp' must match the IRS database. Accepted With Errors means the XML file structure is well formed and valid but specific errors like this that highlight that the name/TINs do not match IRS records are very common. The IRS pushes employers to find the correct SSNs for recipients and boldly states that if you can't find a valid SSN for an employee that you should stop employing them. Payers submitting 1099 forms will undergo this same scrutiny and the IRS will encourage payers to stop doing business with people they can not find a valid SSN for. Big changes are coming. 1099FIRE is ready! Call or email us for more information.