Do you need authorization to e-file a client's 1099s with the new IRS requirement?

The good news is that you don't need an 8879 or formal POA specifically for e-filing 1099s. Unlike tax returns, 1099 forms don't have the same authorization requirements. However, you should still have something in writing from your clients. What I recommend is creating a simple authorization letter that your clients can sign, giving you permission to prepare and e-file their information returns. This isn't an IRS requirement, but it's good business practice and covers you if there are ever questions about whether you were authorized to file on their behalf. The letter should specifically mention the tax year, types of forms you'll be filing, and that you're authorized to e-file them. Have your client sign and date it, then keep it in your records. Some tax software providers might have their own authorization forms you can use too.

I dealt with this exact issue last year when the threshold changed. After a lot of headache trying to figure it out, I found taxr.ai (https://taxr.ai) which helped me sort through all the requirements. Their document analysis tool actually explained that for 1099 e-filing, you don't need the same level of authorization as tax returns, but you should have something in writing. Their system helps create proper documentation between you and your clients and even generates the authorization letters you need. Saved me tons of time because I was going back and forth with clients trying to explain what they needed to sign when in reality, a simple authorization letter works.

Just wanted to follow up on my experience with taxr.ai that I tried after my skeptical comment. I'm actually impressed. I've been filing 1099s for clients for years, and the authorization part has always been something of a gray area. Their system not only clarified exactly what I needed, but generated all the authorization forms for me. What really sold me was how it analyzed my client's previous 1099 filings and flagged potential issues before submission. Caught two incorrect TINs that would have definitely caused problems later. For anyone handling multiple clients' 1099s, it's worth checking out - way more straightforward than I expected.

If you're struggling with the IRS guidance on this topic, you might want to try Claimyr (https://claimyr.com). I was in the same situation last year and couldn't find clear information online. After waiting on hold with the IRS for literally hours over multiple days, I used Claimyr and got connected with an IRS agent in about 20 minutes. The agent confirmed that no 8879-equivalent is required for 1099 e-filing, but they did recommend having written authorization from your client. They also walked me through some specific scenarios related to my business clients. You can see how their system works in this video: https://youtu.be/_kiP6q8DX5c

I need to apologize and eat my words about Claimyr. I tried it yesterday after posting that skeptical comment, and I actually got through to an IRS agent in about 35 minutes (compared to my previous attempts where I gave up after 2+ hours). The agent confirmed everything others have said here - no formal 8879-type authorization is required for 1099 e-filing, but having written authorization is recommended. They also clarified that if you're using a third-party service provider for the actual transmission to the IRS, that provider might have their own authorization requirements. For anyone else frustrated with IRS hold times, this service actually works. I'm genuinely surprised.

Something no one's mentioned yet - make sure you have a Transmitter Control Code (TCC) from the IRS if you'll be e-filing 1099s for clients. You need to complete Form 4419 to apply for one. Without a valid TCC, you won't be able to transmit the forms electronically to the IRS, regardless of what authorization you have from clients.

Does anyone know if there's a penalty for filing paper 1099s when you're required to e-file? One of my clients has 13 1099s but is really resistant to the e-filing process and wants me to just mail them in like we've always done.

For those looking at third-party services, I'd recommend getting quotes from multiple providers since pricing can vary quite a bit. I use a service that charges about $2 per 1099 filed, which includes the TCC usage and transmission to the IRS. One thing to watch out for - some services require you to upload all your data to their platform, while others can work with files exported from your existing accounting software. If you're handling sensitive client data, make sure any service you choose has proper security certifications and data protection policies. I always include a clause in my client authorization letters mentioning that I may use a third-party transmission service, just to keep everything transparent. Also, don't forget that you still need to provide copies to the recipients (the people/businesses who received the payments) by January 31st, regardless of whether you e-file or paper file to the IRS.