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2026 Tax Reporting & Withholding Conference Key Takeaways

2026 Tax Reporting & Withholding Conference Key Takeaways
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Comply Exchange was proud to sponsor the 2026 Tax Reporting & Withholding Conference, hosted by the Tax Reporting Group in Washington, D.C. from May 4–6.

Each year, this conference brings together regulators, industry leaders, and practitioners at the center of tax reporting and withholding—and this year’s discussions made one thing clear:

👉 We are no longer dealing with incremental change. We are in the middle of a structural shift.

From new reporting thresholds and draft forms to the transition to IRIS and evolving digital asset requirements, the direction is consistent:

👉 Regulators are pushing for more structured data, real-time validation, and earlier accountability.

Below are the key takeaways—focused on what’s new, what’s changing, and what actually requires action.

The IRIS Transition Is Not a System Upgrade — It’s an Operating Model Shift

The move from FIRE to IRIS is often described as a filing change, but it’s not just that. It’s a fundamental shift in how tax reporting operates:

  • Real-time validation replaces post-filing error discovery.
  • Record-level processing replaces file-level outcomes.
  • Continuous monitoring replaces batch submission cycles.

Organizations will now need to do things like:

  • Track submission IDs, receipt IDs, and record-level statuses.
  • Manage in-cycle corrections rather than post-season clean-up.

The biggest implication?

👉 Your upstream data quality is now directly tied to your ability to file.

Form 1042-S: More Complexity, More Granularity, More Scrutiny

The Form 1042-S continues to evolve—and certainly not in a way that simplifies things.

New Data & Structural Changes:

  • Expanded address fields requiring more granular data capture.
    • Prior box 12h now has an additional field (box 12i) to report a room or suite number.
    • Prior box 12i (city/town, state/province, country, zip) has been separated into: 12j (city or town), 12k (state or province), 12l (country), and 12m (zip or foreign postal code).
  • Additional income codes increasing classification pressure.
    • 59 – Consent fees
    • 60 – Loan syndication fees
    • 61 – Settlement payments

Reporting & Logic Complexity:

  • Greater emphasis on accurate income classification vs. defaulting to “other income”.
  • Continued ambiguity around non-FDAP / non-U.S. source reporting requirements.

Operational Impact:

  • Continued FIRE + IRIS parallel reporting (TY2025) → full IRIS thereafter.
  • Enhanced validation across:
    • Chapter 3 / Chapter 4 statuses
    • Income & exemption codes
    • TIN accuracy

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The takeaway:

👉 1042-S is becoming more data-driven and less forgiving—especially where classification and documentation don’t align.

Draft W-9 Update Signals a Bigger Shift Upstream

While only one piece of the broader puzzle, the newly introduced June 2026 revision to Form W-9 (replacing the draft W-9 that was released in January) reinforces a consistent theme seen across sessions:

  • Increased focus on digital asset reporting classifications.
  • Additional certifications tied to broker activity and exemptions.
  • Continued tightening of TIN accuracy expectations.

Note: Then Draft W-9 (Rev. June 2026) replaces the previously released January 2026 revision. The IRS is anticipated to release another draft of the Form W-9 instructions.

This aligns directly with IRIS and broader enforcement trends:

👉 If your W-9 data is wrong or incomplete, the failure now happens earlier—not at filing.

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Threshold Changes Are Rewriting Reporting & Withholding Strategy

One of the most impactful updates came from recent legislative changes coming out of the One Big Beautiful Bill Act (OBBBA):

New Reporting Thresholds (Effective 2026):

  • 1099-MISC / 1099-NEC threshold increased from $600 → $2,000 or more for calendar year 2026.
  • Indexed for inflation going forward.

Backup Withholding Alignment:

  • Backup withholding now tied to the same $2,000 threshold.
  • Note: This applies only once reporting thresholds are met.

1099-K Reset:

  • The OBBBA reverted the threshold back to $20,000 + 200 transactions.
  • Includes new carry-forward withholding rules where if the TPSO was required to backup withhold on the participating payee in the prior year, it would still be required to backup withhold in the current year if no TIN has been obtained.

The nuance here matters:

👉 Fewer forms may be required—but when thresholds are triggered, obligations become more complex and persistent across years.

Digital Asset Reporting: Relief Today, Complexity Tomorrow

Digital asset reporting continues to evolve—with temporary relief masking longer-term complexity.

Key Updates:

  • Notice 2025-33 → Transitional relief for penalties and backup withholding through 2026
    • Note: This does not apply where other reporting may be required for digital assets such as the Forms 1099-MISC, NEC, K. etc.
  • Notice 2026-20 → Extended relief for broker-custodial digital assets through 2016.
  • Proposed regulations issued would allow for electronic-only 1099-DA delivery. Said another way, if passed this will eliminate the requirement to furnish paper statements if a customer affirmatively consents to their 1099-DA being provided electronically.

What’s Coming:

  • Transition from domestic reporting with an expectation around global CARF alignment.
    • Form 1099-DA reporting is not currently required for non-U.S. brokers or digital asset sales outside of the U.S.
  • Key Considerations:
    • A Form 1099-DA may be required for non-U.S. customers in certain cases on sales outside of the U.S.
    • CARF requires reporting of controlling persons, where there is not required on the 1099-DA.
    • Aggregated reporting is required under CARF vs. transactional data on the Form 1099-DA.

The direction is clear:

👉 Digital asset reporting is moving toward global transparency—with U.S. rules still catching up.

Audits & Enforcement Are Becoming More Data-Driven

The IRS is not just modernizing systems—it’s sharpening enforcement.

What They’re Focusing On:

  • 1042 / 1042-S compliance campaigns
  • Treaty benefit claims (especially misapplied exemptions)
  • Intercompany payments and sourcing
  • FATCA and TIN reporting gaps


What This Means Practically:

  • Increased use of data reconciliation across filings
  • Greater scrutiny of:
    • Documentation
    • Workpapers
    • Internal controls

And importantly:

👉 “Soft letters” are often the precursor to full examinations—not a courtesy notice.

Final Thought: The Cost of Waiting Is Increasing

The biggest risk isn’t misunderstanding a new regulation.

It’s assuming your current processes can absorb these changes.

Because increasingly:

👉 If your upstream data is wrong, your downstream reporting will fail—faster, and more visibly than ever before.

2026 Tax Reporting & Withholding Conference Key Takeaways
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Written By

Lauren Pierce

Lauren has 15 years of experience in U.S. Information Reporting and Withholding. Prior to joining Comply, she worked in the Global Information Reporting and Withholding Practice at Deloitte, advising a variety of clients, including major financial institutions and multinational corporations, on Chapter 3, Chapter 61, FATCA, and CRS regulations. She also focused on documentation review and remediation, procedure enhancements, and reporting, including FATCA, CRS, 1099, 1042, and FBAR. Lauren is a graduate of Sacred Heart University in Fairfield, CT (BS in Accounting).

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