Avalara Targets 1099 Reporting Bottlenecks With AI
The Work Begins Before Filing
The hardest part of 1099 reporting can happen before a business submits a single form. Payment records may sit in different systems, subsidiaries may use different formats, and teams must bring that information together.
At Avalara CRUSH 2026 in Fort Lauderdale, Queenie Lee explores those challenges with Alan Shimel. Lee is Avalara’s general manager of 1099 Reporting. She explains why information reporting involves more than sending contractors a year-end payment statement.
The conversation covers the broader family of reporting forms and the work required to prepare and deliver them. Lee describes a gap between producing an ERP report and completing the filing process. Businesses still need to address IRS submissions, recipient delivery, and applicable state requirements.
Preparing for IRIS and Improving Data Quality
Lee outlines Avalara’s preparations for the IRS transition from FIRE to IRIS. She says the team has invested in helping customers adapt their filing workflows to the newer system.
She also discusses plans for taxpayer identification number matching. Checking identifying information before filing can help teams catch problems earlier. The interview connects that validation work to a broader effort to simplify compliance as systems and requirements change.
For organizations with multiple business units, the challenge extends beyond the final submission. Bringing together files from separate accounting environments can create substantial preparation work. Lee says customer feedback highlighted that upstream burden as an important problem to solve.
Using AI to Simplify Data Ingestion
A planned AI-powered ingestion tool is designed to identify the fields needed for 1099 reporting across differently formatted files. Rather than requiring every source to follow the same template, the proposed workflow would help map information into Avalara’s system.
Lee identifies Versori as the technology supporting that capability. At the time of the interview, she expected the tool to become available during October 2026.
She also reflects on moving from compliance consulting and operating advisory work into leading the business. Customer needs and practical execution remain central to her approach.
For finance and operations teams, the takeaway is to examine the entire reporting workflow. Better data preparation, validation, and filing support can reduce manual effort before deadline pressure builds.
Transcript
Hey, everyone. We're back here at Fort Lauderdale at the Omni Hotel, continuing our coverage of the Avalara CRUSH North America conference. If you haven't seen some of our earlier interviews, I really, really encourage you to.
There's some really good stuff there. I think this is going to be a really good one, too. I want to introduce you to Queenie Lee.
Mm-hmm. Queenie is the GM of the Avalara 1099 product line. Mm-hmm.
That's correct. Right? Yes.
Queenie, welcome to techstrunk TV. It's great to have you here. Yeah.
Thank you for having me. I'm really excited. My pleasure.
Before we talk 1099s and all this, let's talk a little bit about Queenie. Yeah. How did you come to be the GM here?
Yeah. So, probably a lot of steps to getting here, but I can summarize how I got here. So I actually started my career in governance risk and compliance consulting, so that's kind of how- GRC ...
yeah, ties to where I am in the world now. I'm the daughter of an accountant, so- Oh, okay ... that relate a lot to this world.
But yeah, so I started my career in consulting for governance risk and compliance for financial institutions, and then went to business school, worked in pricing at American Express, so- Mm-hmm ... more in the payments world and strategic partnerships there. Then worked in ed tech, actually, at Cengage, where it was actually the era of COVID, so the first time education was disrupted in centuries- Many, many years ...
in helping adapt to that online learning- Mm-hmm ... transition that had to happen really abruptly. Everyone went digital.
Yeah, it was very abrupt because if you think about it, for centuries we just have gone to a classroom with a book, sat there and learned with a teacher. So, that was a really exciting time. But after that, I joined Vista Equity Partners, the private equity firm that it actually has a stake in- Yes ...
Avalara. That's how I got to know Avalara over the years, even before joining Avalara. I joined Avalara in December, so it's been roughly nine months- Oh, so you're- ...
with Avalara, yeah ... you're one of the newest people we've met here. Yeah, I think so.
Yeah. What made you take the leap from the PE to the investment? So, I was on the operating team at Vista Equity Partners, working with businesses that are kind of the size of this 1099 business, and working to grow and scale them really quickly in a three to four year timeframe, and I'd partner with executive teams to make that happen.
And eventually I was like, "You know what? " So, I started looking for a role, and I had known Avalara was a great company to work with, and then I saw the potential that our 1099 business could have and was really excited about that, so I made that leap. It's funny, I have a lot of friends over the years- Yeah ...
who were in VC world- Yeah ... PE world, and it's true because a lot of them were entrepreneurial. Mm-hmm.
Maybe they sold their company- Yeah ... had an exit, or were part of an exit. They went over to the VC/PE side- Yeah ...
and then had that itch to jump back into the- Yeah ... then advising There's like a satisfaction from- Right ... the accomplishment that's a little different, because it's firsthand.
It's not like- Right. You're doing it. Yeah.
You're not just- You're not the second in line ... You know what they say, those who know, do- Yeah ... and those who don't, teach.
I get it. I like that analogy for the- Yep ... situation.
So, a lot of people out here saying the 1099 line, what's so special about 1099? You're not an employee, you're a contractor. Mm-hmm.
And at the end of the year, they send me a form that tells me how much money they paid me, and they didn't take any taxes out. Mm-hmm. What could be hard?
But of course, there's so much more. Yeah, I think we call it 1099 reporting as a broad category, but there's a lot of different tax forms that fall under this information reporting category. I think this is very relatable for most people, but if you have an HSA account- Sure ...
right, you get a form in the mail for the 5498 every year, and that's a non-employee source of payment- Payment ... that you're receiving, right. That it also gets these forms.
But it's a pretty broad world then of different payments that are non-employee payments outside of vendors and contractors that we help capture that information and file with the IRS as well as send to the recipient, yeah. Now, speaking of the IRS, historically, 1099 tracking by the IRS was not, well, let's say maybe it wasn't their top priority. Mm-hmm.
But recently, over the last few years anyway, they've actually come out with bulletins and- Yeah ... and announcements. They're cracking down, if you will, tightening up- Yeah ...
1099 type compliance. And as you say, when we say 1099, we're not just talking about- Yeah ... the 1099 form itself.
There's a whole- There's this whole family of forms ... there's like 50 forms or something, yeah. " More IRS- More of those, yeah.
More inspection ... regulations to deal with. Yeah.
And they look for help. Yeah. Right?
They're looking for help. We used to use Salesforce Pro or whatever, then we merged with another company and they're a NetSuite- Okay. Yeah ...
customer. Wouldn't you expect them to do this for you? Or did they wind up working with Avalara?
Wouldn't you expect something like NetSuite or- Or one of these two to- Yeah ... handle this kind of stuff? Or does NetSuite outsource it to a company- Yeah ...
like Avalara? That's a good question. It's very complicated, this whole category of 1099 reporting.
So, most of our ERPs and systems actually opt to partner with us to take that final mile of- Because it's beyond their... Yeah ... yeah, of filing.
So a lot of the systems will produce a report that you can take, but then you will have to file it with the IRS or send it to the recipients, figure out the state filing requirements, because they don't want to be accountable for all the New regulatory- Sure ... requirements that keep coming out, and they emerge throughout the year. It's deeper than they want to go, right?
Yeah. I mean- Yeah, that's definitely the problem. Yeah ...
my experience with those, and I'm not knocking them, don't get me wrong, but- No, they do great things. Yeah. But my experience with them- Yeah ...
is it's kind of the 80/20 rule. Mm-hmm. Right?
Yeah. They're not going to get you all the way over the finish line. Yeah.
They'll do a basic- Mm-hmm ... skin-deep kind of thing, but- Yeah ... generally you do need a third party- Yeah.
I think- ... specialty solution ... I think if you're a larger filer, for instance, in the new system that the IRS is taking filings in, if you have more than 100 forms, you can't submit through a simple portal, so you should really- Really ...
ideally be working with- So that, yeah ... a provider, and most larger businesses will have more than 100 forms, right, to file. Absolutely.
Yeah. When you start thinking about all the- Yeah ... different kinds of forms.
Yeah. So, we're here at Crush. What's new with the 1099 product line here at Crush?
Yeah. So there's a lot of exciting things coming in our 1099 product. The first one is we've spent a lot of time investing in the transition from FIRE to IRIS.
And when I say that, FIRE is the filing system the IRS had for filing 1099s for the past 40 years or so. Really? Okay.
But they're moving off of it into a new system called IRIS. And so our team has been preparing for that transition and making sure our customers are able to file their forms through IRIS. So that's one major thing that we're prepared for.
The other things that we are unveiling soon are the ability to TIN match. So you think of all of us have a Social Security number. Businesses have an EIN.
We're launching a service where you can verify those, which is particularly valuable as we have this new IRS filing system to do that. And then we are also going to be providing a data ingestion tool that takes your data for 1099 filing in any format. You can dump it in, even if it's multiple files from different subsidiaries, different parts of the business that might be using different systems, and we will be able to parse out exactly the fields that are needed for 1099 filing and- Oh, that makes sense ...
run it into our system So much. That's easy. Yeah.
So that's- What a pleasure that is ... the exciting part. Yeah.
That's actually the biggest headache we hear from customers about. " And I was like, "Okay, then we need to solve for that problem," right? Even if it's what people think of as something outside of our box, yeah.
I'll be very honest, before we- Yeah ... merged with Futurum Group- Oh, yeah. That's a nightmare.
Yeah ... which is what we're part of, Techstrong Group, we were a small company- Yeah ... 25, 35 people.
But even at 35 people, we did have HSA, and FSA- Yeah ... and everything else. It was one of the biggest reasons we went with a full-blown PEO- Oh, yeah ...
versus just a payroll provider- Yeah ... or something, because it was just those forms. Yeah.
Filing those, your W-2s- Yeah ... and everything are- Yeah ... fairly straightforward, but there's a lot of aggravation that- Yeah ...
comes in once you start with the benefits. And in our business, though we were only 25, 35 full-time employees, we also had three times that in contractors. Yeah.
That makes sense. People who write. Yeah.
Writers, freelancers, stuff like that. So for us, having that- Yeah ... that piece was a real- Yeah.
So- ... piece of work. we're excited for that, because- Yeah ...
" And the interesting part is, because the IRS is transitioning its filing system, everyone has to adapt their old file formats to the new one anyway, so we figured- So- ... this is a tool to use it. Yeah ...
good as time, good as time as any. Yeah. We hear so much about AI.
Mm-hmm. Can that help us here? So yeah, this tool for data ingestion is actually AI powered.
Oh, it is? On the back end? Yeah.
Ah. By Versori, which is an acquisition Avalara made earlier this year. Yes.
We spoke about it yesterday here. So, yeah. Yeah, so we partner with them.
We're partnering with them on this, so very exciting. Yeah. So they're providing the kind of intelligence- Yeah ...
to make that happen. The brains behind it. That's right.
And is that available now, or it's coming soon, or what's the story? It'll be available in October, so pretty soon. Yeah.
Next week. Or the week after. Not quite next week, but- Yeah ...
in a few weeks time, right. Yeah. Oh, in October.
Yeah. Not October 1. I gotcha.
Yeah, not October 1, but really soon. But coming within about a month or so. Yeah.
Excellent. If you're an Avalara customer, let's say for the sales tax- Mm-hmm ... but this sounds like something we really could use.
Mm-hmm. How do you slide over into the 1099 world? Yeah.
Most of our existing customers that are interested in 1099 might contact their customer account manager, their CAM- Mm-hmm ... and express interest in- And they can- ... the 1099 product ...
get it out. Yeah, but there's also, I believe, some of their customer account managers are reaching out to them being like, "Hey, 1099 filing season's coming. " Yeah.
I'm sure people are going to see that- Yeah. and see this is like an answer to my prayers. Yeah.
So we're really excited. Very cool. Yeah.
So December will be a year. Yeah. Looking back, is it everything you've expected, hoped, wanted?
That's a good thing to reflect on. I think it has been everything I had hoped in terms of Avalara being a fast-moving, innovative, collaborative, fun place. I think everyone sees all the orange on us, right?
That's part of the culture. And it's been rewarding in particular because I think we've seen a lot of growth in the 1099 business the past year. Yeah.
So that's been fun, and seeing my team come together and really help our customers navigate through these major compliance changes has been really, really rewarding as well. So yeah, I've really enjoyed it. Very cool.
Queenie, best of luck. Yeah. Thank you.
Continued success with this. Keep having fun. Yeah.
Appreciate it. Thanks for having me on. Thank you.
I appreciate you. Queenie Lee, GM of the 1099 business line here at Avalara. We've got more Avalara Crush features and content coming the rest of the day.
Hope you'll check them out. You're watching Techstrong TV.
