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The IRS Affordable Care Act (ACA) Enforcement Office, located in Ogden, Utah, had been temporarily closed since late March 2020, due to state stay-at-home orders issued in response to the COVID-19 pandemic. The office was scheduled to reopen July 15th; however, this was delayed and the office reopened in late August 2020.
During the first week of September, the Ogden office began issuing IRS Letters 5699 for tax year 2018 to non-filers. We see this as a signal that the IRS will soon begin issuing penalty letters (such as IRS Letter 226J) for non-compliance with the ACA. (Note that the IRS began issuing Letter 226J penalty notices for the 2017 tax year in June 2019.)
IRS Letter 226J is a penalty notice issued by the IRS to Applicable Large Employers (ALEs), employers with 50 or more full-time employees and full-time-equivalent employees, who have had a full-time employee receive a Premium Tax Credit (PTC) from a state or federal health exchange for one or more months. When the employee receives a PTC, the IRS will evaluate the employer’s ACA compliance in accordance with the Employer Shared Responsibility Provision (ESRP) of the ACA, commonly referred to as the
