IAC-12 received three host bids. The first bid was posted by Muralos and Almuzahara. Hot Skitty on Wailord Action posted a bid of their own with a highly unconventional format, in order to force a host vote, rather than the Muralos/Almuzahara bid being selected without a vote by the IAC-OC. HSoWA did not actually intend to host IAC-12, simply to force a vote. Squidroidia posted a similarly unconventional bid for reasons unknown.
Teams were seeded into one of six pots according to the interim IAC ranking system introduced at IAC X, updated as of the end of the World Cup 87 finals; ties between teams with the same rank were broken by the order in which the tied teams registered for the tournament, with the first team(s) to register seeded highest. Muralos and Almuzahara were seeded in Pot 1 by right as hosts.
In the group stage, the ranking of teams in each group was be based on the following criteria:
Points (3 points for a win, 1 point for a draw, 0 points for a loss);
Points in matches between tied teams;
Overall goal difference;
Overall goals scored.
In the event that more than two teams were initially tied and at least one team won or lost a tiebreaker, the tiebreaking procedure would restart from the first tiebreaker for any teams which might still be tied. In the event that all results were equal, the teams' ranks would have been determined by drawing of lots.
In the knockout stage, if a match was tied at the end of normal playing time, two fifteen-minute periods of extra time would be played. If the match was still tied at the end of extra time, a penalty shoot-out would be held to determine the winners.