Since late December, 2016, many Applicable Large Employer Members have received IRS Letter 5699 from a Tax Compliance Officer at an address in Florence, Kentucky.  The “Dear Taxpayer” letter is headed: “Request for Employer Reporting of Offers of Health Insurance Coverage (Forms 1094-C and 1095-C).”  We have assumed the authenticity of these letters.

Each letter tells the recipient that no 2015 Form 1094-C or Form 1095-C was received from the taxpayer ID number appearing atop the letter and instructs the taxpayer to check one of these boxes and return the letter by mail.

[ ] I was an ALE for calendar year 2015 and already filed Form 1094-C and Forms 1095-C with the IRS using the following name __________ and employer identification number (EIN) _______ on date ____.

[ ] I was an ALE for calendar year 2015 and my Form 1094-C and Forms 1095-C are included with this letter. (Do not use this box if you are required to file electronically.)

[ ] I was an ALE for calendar year 2015 and will file my Form 1094-C and Forms 1095-C with the IRS using the following name __________ and EIN ______ by date ___.  (If more than 90 days from the date of this letter, explain below under “Other.”)

[ ] I was not an ALE for calendar year 2015.

[ ] Other (Indicate below or attach a statement explaining why you have not filed the required returns and any actions you plan to take.)

[ … ]

If you are required to file information returns under IRC Section 6056, failure to comply may result in the assessment of a penalty under IRC Section 6721 for a failure to file information returns.

If you have questions, please contact the person shown at the top of this letter.

Remember, there are two penalties for each missing Form 1095-C – $250 for failing to deliver it to the employee and another $250 for failing to file it with the IRS.  Lesser penalties apply to late filing and certain filing errors.  As they say in the Exempt Organizations group, “BOLO” – i.e., Be On the Look-Out.

IRS CIRCULAR 230 DISCLOSURE

Thank you for your interest in our information on the current status of Affordable Care Act and its implementation. While we are happy to provide you our best information and analysis of the regulations promulgated by the Internal Revenue Service, please be advised that the contents and conclusions contained in this article and any email communication are introductory and educational in nature and do not express a formal, enforceable opinion. Nothing contained in this article and any email communication is intended to be used, or relied upon by any taxpayer for the purpose of avoiding taxation and penalties that may be imposed under the Internal Revenue Code. Any statement contained in this article and any email communication relating to any federal tax issue may not be used by any person to support the promotion, marketing of, or used to recommend any transaction for the purpose of avoiding taxation or penalties.