Understanding Your Letter 227

Understanding Your Letter 227

Experts estimate over 30,000 Letter 226J penalty letters have been sent to employers by the IRS. IRS Letter 227 is the key to understanding the IRS response to your attempt to avoid a penalty. 

If you have received and responded to IRS Letter 226J regarding the proposed Employer Shared Responsibility Payment (ESRP), you should be receiving a reply. This reply will guide you through the next steps and it's very important that you follow the instructions carefully.

The IRS has put a new webpage up on their site for more information to help you navigate your ongoing responsibilities. Because there has been so much noise concerning the ACA, many employers have either ignored these penalties or believe that there will be some interim relief granted that will make them go away. There have been no signs from the IRS or other regulatory bodies that this will be the case.

The prudent thing to do at this point in time is to continue to pursue minimizing these potential penalties. This is a fact intensive analysis and if the firm assisted you in preparing the Forms 1094 and 1095 is unable to provide support in this area, this task will be further complicated.

BenefitScape has assisted a number of firms in replying to these proposed penalties and we can interpret the data that you have sent in order to help prepare an adequate and successful response. If you would like assistance with your Letter 226J and/or Letter 227, or if you would like additional information, please contact Kim at kim.phillips@benefitscape.com or call us (508) 655-3307. 



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