The IRS continues to move forward in developing processes that appear to lead to the assessment of Play or Pay penalties under the ACA.
In April, the agency indicated that it was preparing to test processes for assessing penalties against employers that failed to offer coverage to one or more full-time employees in 2015 or 2016.
In July, I wrote about letters the agency was sending employers asking them to verify whether they had met their ACA reporting obligations (1095-C and 1094-C forms) for 2015 and 2016.
And now, the IRS is sending letters to employers about errors in the 1095-C and 1094-C forms for the 2016 tax year (filed in 2017).
What you need to know
The new batch of letters from the IRS appear to be relatively harmless. They inform employers that the agency was unable to process the forms submitted earlier this year due to errors. So far, the only error that has been identified seems to be that the forms were submitted in “portrait” view instead of in “landscape” view.
Interestingly, the forms are going out both to employers that filed paper forms and to those who filed them electronically, in spite of the fact that it would not be possible for electronically filed forms to have been provided in portrait view.
In addition, at least one of our clients has received a letter instructing them to resubmit the forms in landscape view even though that is how they were submitted originally.
What you need to do
If you receive one of these letters, review it carefully to make sure it is about the formatting error described above, and not some other error. Assuming it is, some or all of the following actions may be advisable:
- Resubmitting the forms in landscape format, even if they were submitted that way originally, by precisely following the instructions in the letter for doing so;
- Notifying the IRS that you filed the forms electronically and therefore they could not have been filed in portrait view by calling 816-499-6847 (or the number provided on the letter, if different) and following the instructions; or
- Working with your ACA reporting vendor, attorney, and/or accountant to develop an appropriate response.
As always, The Miller Group continues to keep a close eye on the IRS’s efforts in the area of ACA enforcement. We will let you know about new developments as they happen. In the meantime, feel free to contact me with any questions you may have.
By Julie Athey, Director of Compliance