Timer1...can't enable/disable.

DrAzzy:
^ is bitwise xor - it requires two operands.

~ is bitwise not, which is I think what was meant.

I would use the timer in PWM mode, and turn on and off the output compare to get the data out, rather than using interrupts and CTC mode.

I have re-written my code somewhat and think I have a working prototype...

void setupIRLed() {

  // TOCC7 i.e. PB2 will run on the OC1A output...
  TOCPMSA1 = 0;
  TOCPMSA0 = 0;
  TOCPMSA1 |= (1 << TOCC7S0); // TOCC7S[1:0] = 01 = OC1A on PB2.
 

  //FAST 8-bit PWM: WGM[13:10] = 0101 (mode 5) 13=0 WGM12=1 WGM11=0 WGM10=1
  TCCR1C = 0;
  TCCR1A = 0;
  TCCR1A |= (1 << WGM10) | (1 << COM1A1);   // Clear on compare.  Set on Bottom.
  TCCR1B = 0;
  TCCR1B |= (1 << WGM12) | (1 << CS10); // No pre-scale...so 8MHz per tick.

  TIMSK1 |= (1 << OCIE1A);
  /* In 8-but FAST PWM mode, the OCR1A port is set (goes high) at BOTTOM (0). 
   *  When it then reaches OCR1A, the bit is cleared. 
   *  The timer continues to TOP (ICR1) value.
   *  
   *  As pin goes high at 0 for 105 counts, then low for 105 (till 210)...
   *  that is a period of 210 counts.
   *  8MHz / 210 =~ 38KHz
   */
  
  OCR1A = 105;
  ICR1 = 210;

  // Set timer to 0 to avoid the "miss".
  TCNT1 = 0;

}

I am then using the following code to "turn on and off" the modulated PWM pin...

#define iron   TOCPMCOE |= (1 << TOCC7OE) // Enable the output on TOCC7 (PB2).
#define iroff  TOCPMCOE =0

Is this a reasonable approach?

I am unsure if the LED is under-powered or there is an issue with my code mind...

I can see it in my phone camera but it seems to have to get pretty close to a TSOP receiver to trigger it.

The schematic is here, I have used a 220 ohm on the transistor base and a 15ohm on the LED mind.