  IRAS 13224-3809 was observed in 2011 for 500 ks with the XMM-Newton
observatory. We detect highly significant X-ray lags between soft (0.3 - 1 keV)
and hard (1.2 - 5 keV) energies. The hard band lags the soft at low frequencies
(i.e. hard lag), while the opposite (i.e. soft lag) is observed at high
frequencies. In this paper, we study the lag during flaring and quiescent
periods. We find that the frequency and absolute amplitude of the soft lag is
different during high-flux and low-flux periods. During the low flux intervals,
the soft lag is detected at higher frequencies and with smaller amplitude.
Assuming that the soft lag is associated with the light travel time between
primary and reprocessed emission, this behaviour suggests that the X-ray source
is more compact during low-flux intervals, and irradiates smaller radii of the
accretion disc (likely because of light bending effects). We continue with an
investigation of the lag dependence on energy, and find that isolating the
low-flux periods reveals a strong lag signature at the Fe K line energy,
similar to results found using 1.3 Ms of data on another well known Narrow-Line
Seyfert I galaxy, 1H0707-495.
