The IRS has revealed some more drafts for their 2016 reporting forms, and already things have changed. You may recall in an earlier ACA Times article where the topics of “good faith” and “reasonable cause” were deciphered, as the AIR system became more cognizant of margins of error when filing.
These errors inevitably could bring on penalties, so phrases like “good faith effort” came into in the conversation—suggesting that as long as there was an effort to be correct in information, penalties could be waived, along with a reasonable cause for such mistakes.
As the IRS brings the new C-Series Forms (1094-C and 1095-C) drafts for 2016, good faith effort compliance has now been eliminated. When filing now, proof of reasonable cause must be shown. So what does this mean? Well, in 2015, while ignorance may not have been bliss, employers had some shelter through good faith compliance as many employers were puzzled with the seemingly complicated methods of reporting information.
In addition, missing or incorrect tax identification numbers (TINs) were more prominent during filing this past year, so the IRS took noticeable measures to both articulate the reporting process further, as well as fix the previous technological difficulties when filing and set up firm procedures when providing TINs. Errors will be less forgivable with 2016 reporting.