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ACA Reporting Penalties for Errors & Failure to Comply

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ACA Reporting Penalties for Errors & Failure to Comply

BenefitScape understands the risk that our clients face whether forms are not produced accurately and on time. Five years we have invested heavily in technologies that enable us to turn filing information around quickly. In addition working with us will go a long way to establishing the company utilized honoring their reporting requirements. Our fees for assisting clients who wish to avoid these penalties their fraction of the penalty costs.

According to the IRS, “A provider of minimum essential coverage that fails to comply with the information reporting requirements may be subject to the general information reporting penalty provisions for failure to file correct information returns and failure to furnish correct payee statements. For returns required to be made and statements required to be furnished for 2017 tax year returns, the following apply.

  •          The penalty for failure to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.
  •          The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.
  •          Special rules apply that increase the per-return and per-statement and total penalties with no maximum limitations if there is intentional disregard of the requirement to file the returns and furnish recipient statements.”

There may be some safe harbors and penalty relief…But why count on it?

IRS Notice 2018-06 provides that good faith reporting standards will apply once again for 2017 reporting. This means that reporting entities will not be subject to reporting penalties for incorrect or incomplete information if they can show that they have made good faith efforts to comply with the 2017 Form 1094 and 1095 information-reporting requirements. This relief applies to missing and incorrect taxpayer identification numbers and dates of birth, and other required return information. However, no relief is provided where there has not been a good faith effort to comply with the reporting requirements or where there has been a failure to file an information return or furnish a statement by the applicable due date (as extended).

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