We report on X-ray flares that were observed from the active galactic nucleus I Zwicky 1 (I Zw 1) in 2020 January by the NuSTAR and XMM-Newton observatories. The X-ray spectrum is well-described by a model comprised of the continuum emission from the corona and its reflection from the accretion disc around a rapidly spinning (a > 0.94) black hole. In order to model the broadband spectrum, it is necessary to account for the variation in ionization across the disc. Analysis of the X-ray spectrum in time periods before, during and after the flares reveals the underlying changes to the corona associated with the flaring. During the flares, the reflection fraction drops significantly, consistent with the acceleration of the corona away from the accretion disc. We find the first evidence that during the X-ray flares, the temperature drops from $140_{-20}^{+100}$ keV before to $45_{-9}^{+40}$ keV during the flares. The profile of the iron K line reveals the emissivity profile of the accretion disc, showing it to be illuminated by a compact corona extending no more than $7_{-2}^{+4}$ rg over the disc before the flares, but with tentative evidence that the corona expands as it is accelerated during the flares. Once the flares subsided, the corona had collapsed to a radius of $6_{-2}^{+2}$ rg. The rapid time-scale of the flares suggests that they arise within the black hole magnetosphere rather than in the accretion disc, and the variation of the corona is consistent with the continuum arising from the Comptonization of seed photons from the disc.
