Getting ready for 2026 1099 filing? See what’s new from Avalara

If 1099 compliance feels more complex this year, you’re not imagining it. The 2026 tax year marks a significant shift in how the IRS processes electronic filings, and Avalara has been busy making updates to help you get ahead of it. There are new stand-alone TIN matching products and Avi for 1099, to name a few. Here’s all of what’s new with Avalara 1099 & W-9 and what it means for your team.

• The IRS is replacing FIRE with IRIS. Starting November 19, 2026, the IRS will retire FIRE and enforce strict upfront validation via IRIS, eliminating the old “submit first, fix later” filing approach.

• Upfront TIN verification can prevent costly errors. Validating payee names and TINs before filing can avoid immediate form rejections, IRS penalties exceeding $340 per form, B-notices, and mandatory 24% backup withholding.

• Avalara adds new features. Avalara 1099 & W-9 now features updated data fields and CSV templates for IRIS readiness, and Avi, designed to help your team navigate the complexities of 1099 filing with confidence.

For decades, organizations filing 1099s electronically have used the IRS FIRE (Filing Information Returns Electronically) system. Now the IRS is transitioning to IRIS (Information Returns Intake System) as its modernized filing platform and retiring FIRE on November 19, 2026. This is a major, mandatory change that impacts every organization that files 1099s electronically, regardless of the tool they use.

The biggest difference is that IRIS validates data at the time of submission, while FIRE was more permissive, allowing errors to be discovered months after filing. Under the new system, data quality issues that previously flew under the radar during submission are now more likely to cause filing failures or rejections upfront. This means the old “submit first, fix later” approach is no longer a safe strategy.

As the IRS shifts from legacy FIRE to modernized IRIS intake, strict electronic validation increases the risk of batch rejections and fines under IRC § 6721/6722. Mismatched records can also trigger costly CP2100 B-Notices and mandatory 24% backup withholding. With this change, managing payee data manually leaves organizations vulnerable to outdated vendor records, statutory filing penalties, and year-end filing chaos.

To help businesses stay ahead of these compliance risks, Avalara has launched two new TIN-matching products, Avalara Real-Time TIN Match and Avalara Bulk TIN Match. These tools validate records directly against official IRS databases so you can correct inaccurate data before it can cause issues.

Avalara Real-Time TIN Match 

Avalara Real-Time TIN Match provides instant payee verification directly within your onboarding workflows via API. Designed to accommodate daily transactions, it quickly validates legal name and TIN combinations during registration, helping ensure that only accurate vendor data enters your systems.

Avalara Bulk TIN Match

Avalara Bulk TIN Match enables teams to verify extensive payee lists through an API, whether they have hundreds or hundreds of thousands of records. This solution provides validated IRS match results to teams within 24 hours to help proactively identify discrepancies and collect updated W-9s before year-end 1099 reporting deadlines.

Why Avalara Real-Time TIN Match and Avalara Bulk TIN Match matter

Validating TINs against official IRS records prior to payment disbursement and tax filing helps businesses to:

• Ensure IRIS filing readiness. Validate payee name/TIN data to ensure clean data ahead of IRIS submission, at which time strict intake validation can trigger IRIS errors or rejections, adding rework right before deadline.

• Lower IRS penalty exposure. Protect operating margins by identifying mismatches before filing returns under IRC § 6721/6722 to avoid penalties that can exceed $340 per incorrect form before interest, with no cap for intentional disregard.

• Get rid of B-notice workloads. Reduce the administrative strain of IRS Notice CP2100/CP2100A letters and avoid stressful manual remediation during tax season.

• Shield against backup withholding. Identify unverified payee records early to proactively identify discrepancies and collect updated W-9s ahead of filing season to help mitigate the risk of mandatory 24% withholding on disbursements.

• Catch upstream W-9 errors. Flag mismatched W-9 records — often caused by typos, trade-name confusion (DBAs), and disregarded entity mismatches — before they slip through standard form collection undetected.

• Accelerate payee registration. Enable contractors, sellers, and vendors to complete onboarding smoothly while capturing accurate tax data from day one.

Avalara has introduced several updates to Avalara 1099 & W-9 to align with new IRIS requirements. Here’s what you need to know.

Tax ID type is now required

The update requires users to select the correct Tax ID type — Individual or Business — for both your Payers and Recipients. Existing payers will default to Unknown. This won’t block filing, but Avalara strongly recommends updating them to reduce the risk of IRS rejection.

New name fields for individuals

If your Payers or Recipients are individuals rather than business entities, you’ll need to enter their names into newly designated fields: First Name and Last Name (Middle Name and Suffix are optional). This applies when filing new forms or corrections. In the past, many organizations submitted incomplete or inconsistently formatted records for sole proprietors and individual payees. The change complies with more granular IRIS data requirements for these types of payees.

Updated CSV templates

If you import data using CSV templates, new templates that include the required Tax ID type and name fields are now available for download. These updated templates apply to tax year 2025 and prior filings. Tax year 2026 CSV templates will be available later this fall. You’ll need to use the new templates to file late or resubmitted forms or corrections for prior years.

API integrations

If you access Avalara 1099 & W-9 via API, your existing fields will remain supported, with no interruption to your integration. However, Avalara strongly recommends updating your integration to use the new fields to reduce the risk of form rejection as IRIS enforcement evolves. Full API specifications are available on the Avalara Developer Portal.

Previously submitted filings are not affected by the 2026 product updates, and corrections can still be made following the previous process.

We’ve also launched Avi for 1099, built directly into Avalara 1099 & W-9. Avi is designed to help your team navigate the complexities of 1099 filing with confidence. Ask questions about the Avalara 1099 & W-9 interface and get plain-language guidance on the filing process, all without leaving the Avalara 1099 & W-9 interface. To get started, sign in to Avalara 1099 & W-9 and look for the Avi icon.

The FIRE to IRIS transition and updated IRS data requirements are designed to make 1099 compliance more accurate, secure, and sustainable year over year. Here are the steps that matter most right now.

• Review your vendor records. Audit TIN types, name formats (especially for individual/sole proprietors), and existing W-9s for completeness.

• Update CSV templates if you use file imports to bring data into Avalara 1099 & W-9.

• API users: Review the updated API fields on the Avalara Developer Portal and plan your integration update.

Learn more about Avalara 1099 & W-9 or talk to a 1099 expert to see how Avalara can help your team prepare for the big 2026 filing season changes.

Sales tax rates, rules, and regulations change frequently. Although we hope you’ll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.