Let Experience Lead The Way
  1. Home
  2.  » 
  3. ERISA Compliance
  4.  » IRS Employer Penalty Responses

For A Strong Defense After Receiving An IRS Employer Penalty Notice

RAS Law, P.C., provides experienced representation of employers that have received IRS Code Section 4980H (a) or 4980H (b) excise tax penalty assessments under the ACA’s employer shared responsibility (ESR) provisions. Our law firm is solely devoted to advice and assistance for employers in employee benefit compliance issues and controversies. At RAS Law, P.C., our attorneys are known for their proficiency and high success rate in complex areas of the law affecting employers. They consistently deliver practical solutions cost-effectively, saving clients time and money and preventing the escalation of problems such as ACA-related penalties.

Understand The IRS 226J Letter Assessing ACA-Related Penalties

For background information about the IRS 226J letter, we invite you to read the following paragraphs. If you would prefer a conversational explanation from a lawyer, do not hesitate to reach out to attorney Rick Szczebak in the Boston area. In November 2017, the IRS began issuing what are known as IRS 226J letters assessing proposed employer shared responsibility penalties under the ACA. At that time, the IRS focused on the 2015 reporting year, which was the first year employers were required to report offers of health plan coverage to their employees using IRS Forms 1095-C. The IRS has since moved on to the 2016 reporting year, and rumor has it that 2017 proposed assessments are underway. Letter 226J was developed by the IRS as the means to notify employers of proposed employer mandate tax assessments for the 2015 reporting year. The IRS apparently uses its own records to determine who received a premium tax credit (PTC) in 2015 and, for each individual, matches the PTC data against what the employer reported for the individual on the Form 1095-C for the applicable reporting year.

Don’t Ignore The Importance Of A Timely Response

The proposed employer shared responsibility payment (ESRP) identified on page one of the letter is proposed, but if the employer does not respond to the letter within the 30-day response window, then the IRS will send the employer a notice and demand message regarding the proposed ESRP. The amount owed will be subject to IRS lien and levy enforcement actions, accruing interest until the total ESRP balance is paid in full. It may be that the proposed ESRP is the result of faulty reporting on the part of the employer or its vendor, but the employer must nevertheless deal with the IRS to correct any reporting mistakes within 30 days or suffer the assessment and IRS enforcement. Remember that the employer is ultimately responsible for any penalties, even if caused by a vendor’s mistake. Our legal team urges you to get RAS Law, P.C., on board as soon as your business receives a 226J letter.

Protect Your Business: Get A Lawyer’s Help To Respond Effectively

You may be tempted, but don’t try to fix this yourself. Contacting your vendor may not bring satisfaction, either. Remember, if a vendor was used to prepare the initial filing for the applicable reporting year and mistakes were made in the filing, the vendor either made the mistakes (strike one) or allowed the employer to make mistakes (strike two). Now is probably not a good time to have the vendor strike out in front of the IRS on your behalf. Get the customized counsel that you need. To schedule a consultation without delay, call 866-463-2979 or send a simple email inquiry.