The IRS has been issuing the 2017 Employer Shared Responsibility Penalty (ESRP) assessments (Letter 226-J). The Letter 226-J provides the IRS’ determination of whether an “applicable large employer” may be liable for an ESRP for a particular calendar year and shows the proposed assessment of the penalties based on the Forms 1094-C and 1095-C the employer filed with the IRS, as well as whether or not the employer’s employees received premium tax credits on their individual income tax returns. The employer has a certain time period to (i) agree with the assessment and pay the penalties; or (ii) disagree with all or part of the assessment (and remit all, part, or none of the proposed assessment, as applicable).
Importantly, we have noticed a trend in the receipt of the Letters 226-J by employers in which the letters are received very close to the deadline noted on the letters for response (sometimes received only 5 calendar days prior to the response deadline). We are not sure why this is happening but perhaps this is due to letters being held by the IRS and sent in a bulk mailing instead of as drafted by their agents. We highly recommend that upon receipt of a Letter 226-J an employer check the response deadline immediately and consider requesting an extension from the IRS by calling the number on the letter. In our clients’ experience, a one-month extension on the responses has been freely given by the IRS when requested.
For more information on the Letter 226-J, see https://www.irs.gov/individuals/understanding-your-letter-226-j.
The post IRS Letters 226-J for 2017 are in the Mail appeared first on Employee Benefits.
Visit our Employee Benefits Blog for the latest news and developments.Visit the blog
Sign up for our newsletter and get the latest to your inbox.