IRS Information Return Enforcement in 2025–2026: Automation, New Thresholds, and What AP Teams Should Know
The IRS workforce shrank significantly in 2025. But that hasn't reduced enforcement pressure on information return filers — it's changed how that pressure gets applied. With fewer staff to conduct manual reviews, the IRS is leaning harder on automated matching systems that compare what you filed against what vendors and payees reported. The math is straightforward: automation scales in a way that headcount doesn't. For AP teams, that means TIN mismatches and filing errors that might have gone unnoticed in a manual review environment are increasingly likely to surface through the IRS's automated systems — and generate notices.
The Enforcement Shift: Fewer Staff, More Automation
The IRS has been explicit that workforce reductions are being offset by investment in technology and automated compliance tools. For information return filers, that means the agency's matching systems — which compare 1099 filings against payee records — are doing more of the work that auditors previously handled manually.
This matters for TIN compliance in a specific way. Automated matching is systematic and consistent. It doesn't prioritize cases by size or relationship. A TIN mismatch on a $650 contractor payment gets flagged the same way one on a $50,000 vendor payment does. Organizations that relied on the friction of manual IRS review to avoid notice on sloppy data are facing a different risk calculus in an automated environment.
The CP2100 process — where the IRS notifies payers of TIN/name mismatches on their filed 1099s — is itself largely automated. The notices go out, the B-Notice obligations attach, and the clock starts running whether or not a human at the IRS has reviewed your account.
The New $2,000 Threshold: What It Changes (and What It Doesn't)
The One Big Beautiful Bill Act (OBBBA), signed in July 2025, raised the reporting threshold for Forms 1099-NEC and 1099-MISC from $600 to $2,000, effective for payments made on or after January 1, 2026. The threshold will be indexed for inflation going forward.
For AP teams, this changes the filing universe — vendors paid between $600 and $1,999 in a calendar year will no longer require a 1099 starting with 2026 payments. Backup withholding obligations also align with the new threshold.
What this doesn't change:
- The $600 threshold still applies to 2025 payments. Forms issued in January 2026 for 2025 activity are subject to the old rule.
- TIN validation requirements don't disappear for vendors below $2,000 — you still need correct TINs for vendors who will exceed the threshold, and for sanctions screening purposes the threshold is irrelevant.
- Vendors who cross the $2,000 threshold need accurate TINs on file before filing season, not after.
- The transition itself creates a compliance risk: AP teams that misapply the new threshold to 2025 activity (filing fewer 1099s than required) face the same mismatch and penalty exposure as before.
The practical effect for many AP teams is a smaller 1099 filing population in 2026, but the same validation discipline required for the vendors who remain in scope.
Digital Asset Broker Reporting: Now Active
Starting with 2025 transactions (reported in 2026), custodial digital asset brokers are required to file Form 1099-DA reporting gross proceeds from digital asset sales. The IRS final regulations confirmed this timeline.
For 2026 transactions, basis reporting requirements also take effect for covered securities.
The TIN matching connection is explicit in the regulations. For 2026, brokers who obtain a customer's TIN and submit it to the IRS TIN matching program — and receive confirmation of a match — qualify for backup withholding relief on certain transactions. This is one of the few places in IRS guidance where TIN matching is specifically identified as a compliance mechanism that reduces penalty exposure, not just a best practice.
Exchanges, trading platforms, and financial technology companies processing digital asset transactions that haven't built TIN matching into their onboarding workflow are facing both a new reporting obligation and a specific incentive to comply.
E-File Threshold: Now 10 Returns
A change that took effect for the 2023 tax year but remains underimplemented: any organization required to file 10 or more information returns during the year must e-file. The previous threshold was 250.
This applies across form types in aggregate — if you file four Forms 1098 and six Forms 1099-A, you must e-file. The requirement doesn't apply separately to each form type.
For smaller AP teams that previously filed paper 1099s, this threshold change means electronic filing is now mandatory for the large majority of businesses that issue 1099s. Electronic filings go through the IRS's FIRE system or the Information Returns Intake System (IRIS), both of which have specific formatting and submission requirements.
The reason this matters for TIN compliance: electronic filing systems process submissions against IRS records more quickly than paper filings, and mismatches surface in the matching cycle faster. The timeline between a mismatch on a filed return and a CP2100 notice is shorter in an e-file environment.
The 2026 Filing Calendar: Key Dates for AP Teams
| Form | Recipient Deadline | IRS Paper Deadline | IRS E-File Deadline |
|---|---|---|---|
| 1099-NEC | January 31, 2027 | January 31, 2027 | January 31, 2027 |
| 1099-MISC | January 31, 2027 | February 28, 2027 | March 31, 2027 |
| 1099-K | January 31, 2027 | February 28, 2027 | March 31, 2027 |
| 1099-DA | February 17, 2027 | February 28, 2027 | March 31, 2027 |
Dates above are for 2026 tax year activity. For 2025 tax year filings (already due), 1099-NEC was due February 2, 2026; most other 1099s were due March 2 (paper) or March 31 (electronic).
What the Enforcement Environment Means for TIN Validation Timing
The combination of more automated IRS matching and faster e-file processing cycles compresses the window between filing and notice. That makes pre-filing TIN validation — running your vendor list through IRS TIN matching before submitting 1099s — more valuable, not less, in the current environment.
The alternative is discovering mismatches via CP2100 after the fact, triggering B-Notice obligations, vendor outreach campaigns, corrected filings, and potential backup withholding — all against the backdrop of a matching system that processes notices systematically regardless of the size of your organization.
For AP teams working through what the $2,000 threshold transition means for their 2026 vendor population, now is a reasonable time to also assess whether your TIN validation process covers the vendors who remain in scope — and whether your data is current.
How TIN Comply Supports Information Return Compliance
- IRS TIN Matching — validate your full 1099 population before filing to catch mismatches before they generate CP2100 notices
- Bulk File Processing — submit your vendor master in a single file; results come back across TIN matching, EIN lookup, and sanctions screening
- W-9 Collection — automated vendor outreach to collect and validate W-9s before filing season, not during it
- CP2100 & B-Notice Handling — if you've already received a CP2100, the managed service handles the full response workflow
- API Integration — for digital asset platforms and fintechs building TIN validation into onboarding to qualify for backup withholding relief
Start a free trial or learn about our managed compliance services.
Bottom Line
The IRS enforcement environment for information return filers in 2025–2026 is defined by three things: a reduced workforce leaning harder on automated matching systems, a new $2,000 reporting threshold creating transition risk, and digital asset broker reporting now live with an explicit TIN matching requirement for backup withholding relief. For AP teams, the practical response is the same as it's always been — accurate TIN data on file before filing season — but the cost of not doing it has gone up in an environment where automated systems don't discriminate by account size.
This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified professional for guidance specific to your organization.