If you or your company offers equity compensation (ISOs, ESPPs, RSUs, NQSOs) your year-end reporting process is built around a system that's about to disappear.
The IRS has confirmed it: the FIRE (Filing Information Returns Electronically) system, the backbone of information return filing since the 1980s, is being retired on December 31, 2026. In its place is a more modern platform: IRIS, the Information Returns Intake System. For equity professionals and participating companies, this isn't a minor IT footnote. It touches nearly every form your year-end process depends on.
Why This Matters for Equity Reporting Specifically
FIRE has powered the filing of some of the most consequential forms in equity compensation:
- Form 3921: exercises of incentive stock options (ISOs)
- Form 3922: transfers of stock under an employee stock purchase plan (ESPP)
- Form 1099-B: broker transactions, including sales of shares from equity awards
- Form 1099-DIV: dividends, including on restricted stock
- Form 1042-S: reporting for foreign-held equity, where applicable
If your organization files any of these, you are directly in the path of this transition. There's no opt-out available.
The Timeline You Need to Know
- Tax Year 2025 (filed in early 2026) is the last year you can file through FIRE.
- 2026 filing season: FIRE and IRIS run concurrently, giving filers a bridge year, but you'll need to track which return went through which system for correction purposes.
- December 31, 2026: FIRE is permanently shut down.
- Tax Year 2026 returns (filed in early 2027): mandatory IRIS filing, no exceptions.
One more detail worth flagging: many US states still rely on the legacy Publication 1220 ASCII format used by FIRE, separate from IRIS. That means some organizations will need to support two formats simultaneously through the transition: one for the IRS, one for state filings.
What Actually Changes
Here are things equity teams should know before their next filing season:
Your FIRE credentials won't carry over. IRIS requires its own Transmitter Control Code (TCC), and the application can take up to 45 days to process. If you haven't applied yet, the clock is already running.
The file format is fundamentally different. FIRE used a compact, flat 1220 file format. IRIS runs on XML, which is more detailed, more structured, and less forgiving of shortcuts that may have worked for years under the old system.
Name and TIN matching gets stricter. IRIS requires separate first- and last-name fields, rather than a single combined name field. For equity plans with international participants, name variants, or legal name changes from marriage or other events, this is a common source of costly Name/TIN mismatches if your data isn't clean going in.
Corrections work differently. IRIS allows targeted corrections to individual records rather than requiring a full-file resubmission. Though this is an improvement, it is one that requires understanding a new workflow.
Where This Blocks Equity Teams
In our experience, the risk isn't the IRIS system itself; it's everything upstream of it. Equity data tends to live across multiple systems: your cap table platform, your plan administrator, payroll, and sometimes a spreadsheet someone built five years ago that nobody wants to touch. FIRE's flat-file format was forgiving of that patchwork. IRIS is not.
The organizations that struggle most in a system transition like this are usually the ones who wait until the filing deadline is close to test their data against the new requirements. By then, a name-field mismatch or a missing TCC isn't a minor fix, it's a missed deadline and a penalty notice.
What a Clean Transition Looks Like
A well-run transition to IRIS means:
- TCC applications submitted well ahead of the 45-day window
- Equity data audited and reconciled across systems before it ever touches a filing
- Name and TIN fields validated against IRIS's stricter formatting requirements
- A clear plan for any state filings that still require the legacy 1220 format
- Testing completed before the pressure of a live filing season, not during it
For most in-house teams, that's a lot to build, in addition to running the actual equity program. This is exactly the kind of transition where an outside set of hands, one that's already fluent in both the outgoing and incoming systems, pays for itself many times over in avoided penalties, avoided rework, and avoided stress in Q1.
A Transition Worth Getting Ahead Of
The FIRE-to-IRIS shift is one of the more significant changes to information return filing in decades, and equity compensation sits squarely in its path. The good news is that the timeline gives you room to prepare if you start now rather than in the middle of next year's filing season.
If you'd like help auditing your equity data, applying for your IRIS TCC, or mapping out a filing plan that accounts for both federal and state requirements, we're happy to talk through what a smooth transition would look like for your organization. Contact us to schedule a consultation.
