Earlier this year, the Treasury Inspector General issued their audit of the IRS processes related to Employer Shared Responsibility Payments under the ACA. The report provides good insights for employers into the size and scope of employer penalties for non-compliance with the ACA for tax year 2015. Further the report indicates that the IRS will be enhancing their ability to determine penalties for tax years 2016, 2017 and 2018.
If you are not certain whether you are not you have a penalty and could potentially be receiving one of these penalty letters let BenefitScape provide free penalty assessment for you. After the audit you will have a very good idea of how the IRS is interpreting your ACA filings.
In TY2015 there were 318,296 Applicable Large Employers based on the IRS 1094-C filings. 33,080, or 10.4%, of these ALE's were identified as eligible for penalties concerning non-compliance. Of significant note is that this analysis was for TY2015 when the threshold for offering coverage was only 70% of Full Time employees. In TY2016 the threshold increased to 95%, so one may assume that the percentage of employers subject to penalties will likely increase.
So, whether you have received a Letter 226J or not, now is the time to act. If you've received a 226J Letter for TY2015, you may want to perform an ACA Compliance Audit for Tax Years 2015-17. Even if you have not received a Letter 226J, you may want to perform an ESR Penalty Assessment to identify any potential liabilities.
Get ahead of the curve..Contact BenefitScape to perform a FREE Audit or Assessment.