The IRS ACA Audit Has Begun: What To Do To Avoid Penalties

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The IRS ACA Audit Has Begun: What To Do To Avoid Penalties

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The IRS ACA Audit Has Begun: What To Do To Avoid Penalties

A round of IRS letters have been mailed out to employers, signifying the start of the IRS’s Affordable Care Act audit process. As the Congressional Budget Office (CBO) anticipates nine billion dollars in ACA-related penalties, your company doesn’t have to be included in that figure. As a rule, Applicable Large Employers (ALE) with 50 or more full-time employees or full-time equivalents must offer healthcare coverage to at least 95% of their full-time employees.

This information is reflected in the filing of Forms 1094-C and 1095-C, as the IRS has urged in its recently released letters to certain employers. If you as an employer have received such an IRS letter, within 30 days of the letter, you are required to respond by checking a box, where you will either:

A. Confirm you are/were an ALE in 2015 and have already filed Forms 1094-C and 1095-C, complete with your company name, EIN, and date of filing.

B. Confirm you are/were an ALE in 2015 and include Forms 1094-C and 1095-C for filing.

C. Confirm you are/were an ALE in 2015 and plan to file Forms 1094-C and 1095-C within 90 days of the letter unless otherwise noted. (Note the reason in the supplied “Other” field on the notice.)

D. Confirm you aren’t/weren’t an ALE in 2015.

This is perhaps the simplest means to avoid/minimize reporting penalties that can stem from a lack of ACA compliance . Should you have any questions, contact the IRS immediately upon receipt of their Notice. A sample letter of the ACA audit letter can be seen below.

For information on addressing the ACA audit, visit the free resource:

For any questions or a consultation on the ACA or IRS Letter 226J, contact Gregg Kasubuchi of First Capitol Consulting at (213) 355-5108 or at gkasubuchi@fcci.us.com.