April 10, 2017
The IRS is targeting Applicable Large Employers (ALEs), and employers it believes may have been ALEs, for the 2015 tax year ACA informational returns.
Based on a “review of [IRS] records,” [which we are speculating is based on the employer’s W-2 filings] the IRS is issuing a “Request for Employer Reporting of Offers of Health Insurance Coverage (Forms 1094-C and 1095-C).” Please contact us if you would like to receive an example of the request.
This request alerts the employer that (1) the IRS believes the employer was an ALE for 2015, and (2) the IRS did not receive Forms 1094-C/1095-C for 2015 with the tax identification number contained in the request.
An employer that receives the request has thirty (30) days to do one of the following:
- Attest it was an ALE for 2015 and it filed the requisite forms, and provide the IRS with the date it filed and the employer identification number used in the filing;
- Attest it was an ALE for 2015 (but did not file) and provide completed Forms 1094-C/1095-C;
- Attest it was an ALE for 2015, now needs to file, and it will file Forms 1094-C/10945-C by a specified date. (If longer than ninety (90) days from the date of the notice, the employer must provide an explanation why it will take longer); or
- Attest it was not an ALE for 2015.
The request warns that failure to file the information returns may result in a penalty under IRC Section 6721, which addresses penalties specifically for failing to file information returns. This penalty for failing to file is a separate and independent penalty from the penalties ALEs are assessed for failing to offer coverage under the ACA.
Caution: If an ALE that failed to file for 2015, and now needs to file, it must follow the 2015 instructions and requirements. This may pose a problem for employers relying on reporting software that has been updated for the 2016 reporting year.
If you or your clients receive this type of notice and need assistance determining ALE status, reporting obligations, or responding to the request, please do not hesitate to contact us.