To state the obvious, the IRS has determined that you owe a penalty. An IRS determination is in the legal context a “rebuttable presumption” that is it is presumed to be true unless you can present adequate evidence to the contrary.
Step 1. Read the letter carefully and consider getting expert help. With 30 days to reply,its sink or swim time. Click here for a useful pdf
Remember this process is complex and confusing; seeking expert help is always a good idea.You can reply on your own, review the instructions and prepare your data. If you have a specific issue we would be pleased to help you.click here Sometimes all you need is a little information; where to begin. And remember, any initial consultation with us it is FREE.
The Letter 226J penalty assessment has been determined by a very new and sophisticated IRS system called the ACA compliance Validation System (ACS). This new software examines and combines billions of items of data taken from individual tax forms, 1094/1095 Forms, reports from the various state and federal marketplaces such as healthcare.gov and other data bases. ACS then uses thousands of rules to calculates a unique penalty for each individual employee. These results are then shown on Form 14765 as monthly penalties.
How do you handle your reply?
The notice is time sensitive and a reply is required within 30 days. Unless you intend to pay the amount as stated and/or believe it to be correct you should indicate that you disagree with the findings using form 14764. This halts the process. No reply; you will get a bill and a demand to pay.
Attached is a PDF that spells out how to go about responding. If you have a specific issue we would be pleased to help you. Any initial consultation with us it is FREE. Remember this process is complex and confusing; seeking expert help is always a good idea.
If you wish to disagree you have to provide adequate proof that your assessment is correct. Essentially you Will be disputing whether premium tax credits or available to each employee for the months that they are claimed by the IRS ACS software. In case it hasn’t Dawn done you this is a very detail intensive analysis that requires you have access to the information you have provided to the IRS, the basis on which these calculations were done, and access to employment records.
For our clients we have developed an automated response process using the software we have built called VeriTracACA®. Essentially we store hundreds of data items on each employee and compare our results to those determined by the IRS ACS system. In this first cut we can eliminate many obvious penalties due to inconsistencies with our data. Next we examine each individual monthly penalty not cleared by this step to assure that the penalties are accurate. The result is that only penalties that we can verify should be paid are indicated.
The IRS has powerful software..shouldn’t you have the same?
Using the VeriTracACA® software enables us to examine 100 records for monthly compliance with the proper IRS codes in less than a minute. The economies are obvious, a penalty remediation by an expert that costs $5,000 in fees seeks to remedy millions of dollars in penalties.