IRS Has Started to Issue Penalty Letters An overview of form Letter 226J

Overview provided by Equifax The IRS has begun sending Letter 226J to employers who appear to be non-compliant with ACA regulations – and the proposed penalties could be well into the millions of dollars. Disputing the proposed penalties will require a very detailed response with supporting documentation to disprove each violation noted on the letter that you believe to be incorrect. With only 30 days from the date of the letter to reply, immediate and careful attention is required. Here’s what you need to know: 

If you get a letter, forward it right away! Contact CORPORATE HR so we can discuss.  A response must be received, not postmarked, within 30 days of the date printed on the letter. We Can Request additional time from the IRS. The letter includes a number to call to request additional time. Given the limited 30 day time window to respond, any extension the IRS may provide could prove valuable.  We will Contact Equifax and send a copy of the letter. Equifax can review the letter and direct you to areas of the product to assist with the response preparation. Equifax will also be offering additional services should you require our direct assistance with the assessment and/or dispute of the fine. WE HAVE A SERVICE WITH EQUIFAX THAT MAY BE ABLE TO HELP WITH THIS Take steps to minimize your organization’s compliance risk. While you may not be able to retroactively offer coverage to an eligible employee, you can ensure that the IRS has the most up-to-date reporting information. Clients are highly encouraged to validate their data for tax years 2016 and 2017 and submit corrected forms as needed. Note: Per IRS instructions in Letter 226J, corrections for a tax year in which you have already received a fine proposal letter should be made directly in the response to Letter 226J instead of refiling through the ACA Information Return (AIR) system. THIS IS ONE OF THE REASONS WE STRESS OFFERING EMPLOYEES THAT ARE ELIGIBLE FOR HEALTHCARE, BENEFITS ON TIME. THE PENALTIES CAN BE HUGE AND WHEN YOU DON’T FILE CASES APPROPRIATELY OR CHANGE STATUS FLAGS IN THE SYSTEM ON TIME, YOU ARE POSSIBLY PUTTING YOUR PROPERTIES AND THE COMPANY AT RISK FOR PENALTIES.

Sample of the letter and link to article that breaks it down Sample of the letter and link to article that breaks it down. Make sure you are familiar and if someone gets the mail for you that they know how to recognize this important piece of paper and call your attention to it. https://insight.equifax.com/new-irs-guidance-letter-226j-paying-aca-penalties/ The next slide contains a picture of the cover form but you can also follow this link to see a sample of the entire letter you will get. http://www.lockton.com/Resource_/PageResource/MKT/Compliance/Ltr_226J.pdf Sample of response form for IRS http://www.lockton.com/Resource_/PageResource/MKT/Compliance/Form_14764.pdf

Link to webinar from our brokers at Lockton that will provide further information. https://locktonevents.webex.com/ec3200/eventcenter/recording /recordAction.do?theAction=poprecord&siteurl=locktonevents&ent appname=url3200&internalRecordTicket=4832534b0000000431e50 d8341fee67e5ff8c9534435100634e840ac49aa3d284531b4183b372a1 7&renewticket=0&isurlact=true&format=short&rnd=2159564491&R CID=da8aed733fe40c288e812584f190542f&rID=16408717&needFilte r=false&recordID=16408717&apiname=lsr.php&AT=pb&actappname =ec3200&&SP=EC&entactname=%2FnbrRecordingURL.do&actname =%2Feventcenter%2Fframe%2Fg.do