IRS Penalty Letter Defense for Applicable Large Employers

Since 2017, the IRS has been actively enforcing penalties against Applicable Large Employers (ALEs) related to Form 1094-C and 1095-C reporting requirements using the following letters:

  • Letter 226J – Proposing employer shared responsibility penalties under Code Section 4980H based on information reported by the ALE in its Form 1094-C or 1095-C filings and information reported by the Marketplace regarding individuals who received subsidized coverage.
  • Letters 5699 and 5005-A – Proposing civil penalties under Code Sections 6721 and 6722 for failure to file Forms 1094-C and 1095-C as required.
  • Letter 972CG – Proposing civil penalties under Code Section 6721 for specific filing failures of Forms 1094-C and 1095-C (e.g., failure to timely file and failure to file electronically).

Haff & Raggio, PLLC, has represented numerous ALEs related to these penalties providing savings of more than $100 million to date. Through the strategic partnership with the ETC Companies, Haff & Raggio, PLLC, can extensively review payroll and benefits data, if needed, to mitigate penalty exposure effectively and efficiently.  Services include:

  • Full representation before the IRS, including serving as power of attorney and directly communicating with the IRS on the employer’s behalf
  • Preparation and submission of response letters
  • Preparation and filing of any necessary Forms 1094-C and 1095-C

Form 1094-C and 1095-C and Other Applicable Large Employer Consultations

Haff & Raggio, PLLC, has extensive experience in helping applicable large employers (ALEs) understand all obligations they have under the Affordable Care Act. Whether you require a simple analysis regarding your ALE status or something more complex related to reporting requirements or other ALE obligations, they can help.

Haff & Raggio, PLLC, can provide a wide range of services including:  

  • Determination of employer size and ALE status 
  • Assistance with Form 1094-C and 1095-C reporting requirements, including code determinations
  • Determination of full-time status under the IRS measurement method rules
  • Affordability calculation for employee premiums
  • Preparation of a Look-Back Measurement Method Policy for Identifying Full-Time Employees under Section 4980H
  • Assistance with Late Form 1094-C and 1095-C Filings prior to IRS penalty notifications
  • Penalty exposure review for ALEs out of compliance with the employer mandate and health coverage reporting requirements
  • Assessment of merger or acquisition impact related to ALE status and Form 1094-C and 1095-C reporting obligations
  • Guidance related to full-time status determinations under the IRS monthly measurement methods and look-back measurement methods