Many employers have received IRS Letter 5699 over the last several weeks. Letter 5699 is being issued to employers whom the IRS has deemed may be an Applicable Large Employer (ALE) for purposes of compliance with the Affordable Care Act (ACA), and the IRS has no record of their 1094 and 1095 forms for a Tax Year since 2015. Employers have 30 days from the date of the letter to respond. Employers who are ALE’s are subject to penalties under IRC Sections 6721 and 6722.
There are four options to respond to the IRS:
- Acknowledge that you were an ALE for that Tax Year, and that you DID FILE the required forms and provide the exact name and employer identification number (EIN) under which the forms were filed.
- Acknowledge that you were an ALE for that Tax Year, and that you DID NOT FILE the required forms, and you are providing your 1094-C form and 1095-C forms with your response.
- Acknowledge that you were an ALE for that Tax Year, and that you DID NOT FILE the required forms, but that you will file the forms. Provide the exact name and EIN under which the forms will be filed, and the date by which you will file.
- Declare the you were NOT AN ALE for the Tax Year referenced and provide the supporting reasons in the “Other” section of the response.
The Other section also allows the employer to provide a statement explaining why the employer did not file the required returns and what actions will be taken to rectify the situation.
If you’ve received an IRS Letter 5699, or get one in the future, it’s IMPORTANT to respond as completely as possible within the IRS’s timeframe.
Contact BenefitScape if you have any questions regarding IRS Letter 5699 or need assistance in responding. If you haven’t filed your 1094 and 1095 forms, we can produce your filing, and eFile it with the IRS on your behalf within the required timeframe in most cases. BenefitScape provides end-to-end ACA Compliance solutions to employers of all sizes, that fit within your budget. Call us at 508-655-3307, or email firstname.lastname@example.org.