IRIS (InfraRed Imaging Spectrograph) is the diffraction-limited first light instrument for the Thirty Meter Telescope (TMT) that consists of a near-infrared (0.84 to 2.4 μm) imager and integral field spectrograph (IFS). The IFS makes use of a lenslet array and slicer for spatial sampling, which will be able to operate in 100’s of different modes, including a combination of four plate scales from 4 milliarcseconds (mas) to 50 mas with a large range of filters and gratings. The imager will have a field of view of 34×34 arcsec2 with a plate scale of 4 mas with many selectable filters. We present the preliminary design of the data reduction system (DRS) for IRIS that need to address all of these observing modes. Reduction of IRIS data will have unique challenges since it will provide real-time reduction and analysis of the imaging and spectroscopic data during observational sequences, as well as advanced post-processing algorithms. The DRS will support three basic modes of operation of IRIS; reducing data from the imager, the lenslet IFS, and slicer IFS. The DRS will be written in Python, making use of open-source astronomical packages available. In addition to real-time data reduction, the DRS will utilize real-time visualization tools, providing astronomers with up-to-date evaluation of the target acquisition and data quality. The quick look suite will include visualization tools for 1D, 2D, and 3D raw and reduced images. We discuss the overall requirements of the DRS and visualization tools, as well as necessary calibration data to achieve optimal data quality in order to exploit science cases across all cosmic distance scales.