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As states begin to lift their shelter-in-place orders and begin plans to re-open, employers should take note of recent IRSactivity, as the agency is expediting its efforts to carry out “mission-critical” tasks.
Despite criticism from House Ways and Means Committee members, the IRS has called upon thousands of workers to return onsite for work.
The workers were initially asked to obtain their own personal protection equipment (PPE) before returning onsite, but the IRS has since confirmed that it will be providing employees with disposable masks.
Roughly 10,000 employees are being called upon to return to work to fulfill work duties that can’t be performed while telecommuting, including the following:
- Opening taxpayer correspondence;
- Handling tax documents;
- Taking taxpayer telephone calls and;
- Performing other functions related to the filing season
Employers should note that among these functions, we may see an uptick in ACA enforcement activity.
While the IRS has relaxed some of its enforcement activities, the Office of the Chief Counsel issued field advice on February 24, 2020 making it clear that there is no statute of limitations for the assessment of an Employer Shared Responsibility Payment (ESRP) under Internal Revenue Code Section 4980H. This is especially true as the ACA statute of limitations do not toll during the COVID-19 crisis.
Employers, this means that IRS enforcement activity for non-compliance of the ACA’s Employer Mandate may start to accelerate.
As a reminder to employers in conjunction with the Employer Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
With the IRS returning back to work to carry out “mission-critical” functions, don’t be surprised if ACA penalty notices begin to show up in the mail. The agency is currently issuing Letter 226J penalty notices to employers for the 2017 tax year and is anticipated to begin with 2018 notices sometime this year.
If your organization is experiencing difficulties in complying with the ACA amid the COVID-19 crisis, contact us to discuss options regarding a process for improving ACA compliance and potentially minimizing IRS penalty exposure.
