ALEs can avoid their non-compliance gaps with IRS penalty reduction services

Meant for all ALEs or Applicable Large Employers for the non-compliance issues relating to the needs of the Employer Mandate Provisions under the Affordable Care Act, specifically for the 2015 and 2016 taxable year, the Internal Revenue Service has been sending the dreaded Letter 226-J. Such stringent 226-J IRS penalty reduction services need to be responded to by a maximum of 30 days while negating the operational gaps that direct the penalty notice to such employers.


Herein, such ALEs should invest in hiring trustworthy and highly adept ACA Compliance specialists from esteemed solutions like the ACA Compliance Solutions Services, Inc. to identify and simplify the data loopholes in IRS penalty reduction solutions.

What is the Purpose of Letter 226-J from IRS?

For notifying the ALEs, IRS (Internal Revenue Service) issues Letter 226-J, which mentions the non-compliances for such employers regarding their ESRP (Employer Shared Responsibility Payment) for the health insurance coverage of the applicable employees. The verdict for the ALEs accountability for the ESRP, and the pre-specified penalty fee mentioned in Letter 226-J is based on the information provided in Forms 1094-C and 1095-C filed by ALEs, apart from the IT returns filed by the staff under particular ALE.
 
Now, this crucial Letter 226-J is sent by IRS is sent only to those ALEs, who could not meet their employer-shared obligation of providing the eligible employees their minimum health coverage for a given taxable year. Herein, such letters from IRS are only the proposed penalty charge and do not include an invoice for payment. In such scenarios, the ALEs can request expert guidance from the ACA Compliance specialists.
 
What Different Non-Compliance Penalties are imposed by the IRS?
 
According to the Affordable Care Act (ACA), there are mainly two possible ACA employer mandate charges, namely Penalty A, and Penalty B. Herein, Penalty A is also known as the ‘Sledge Hammer Penalty’ and governed by section 4980H(a). Besides, this charge is functional at the time the ALEs cannot provide the minimum essential health insurance coverage to at least 95% of their full-time staff in any liable calendar month. For example, in 2021, such Penalty A charge is $225/month or $2,700/year compounded by all full-time employees. Such penalties can arise when at the minimum a single full-time employee has not received the minimum essential health coverage for the specific tax year.
 
Again, Penalty B is also called the ‘Tack Hammer Penalty’ and is generally much less in charge than Penalty A. This IRS charge falls under section 4980H(b) and is applicable for those ALEs, who do not come under Penalty A. In this case, such charges are meant for those full-time staff registered under the financed or sponsored exchange coverage. Such employees are not offered minimum essential health insurance coverage, and only provided coverage that is not up to the minimum value of health insurance cover. Unlike Penalty A, this charge never gets multiplied by the full-time employees.

 
 
Through what Measures do the ACA Compliance Services aid the ALEs for the IRS Letter?
 
It is always recommended for the ALEs to approach reputed ACA compliance services such as, ACA Compliance Solution Services offering exclusive help in mitigating the issues arising from non-compliance to IRS. In this context, firstly the ALEs need to study cautiously the Letter 226-J sent by IRS. This is vital, as this penalty letter is only an inquiry notice from IRS, and not an invoice, thereby allowing the ALEs to elucidate their compliances for sustaining the minimum health insurance coverage of their eligible employees.
 
As the deadline for such letters is only 30 days, so they need to act faster and send a valid response to the IRS. ACA Compliance Solution Services offers their experts to assist the ALEs in mitigating the operational loopholes that might have caused such penalty notice from IRS. Such specialists also help the employers to formulate an effective and fast-tracked response to this letter. In this context, Letter 226-J is sent to IRS along with the Review form 14765 showcasing the synopsis of detailed computations of the ALEs.
 
Final Verdict
 
Acknowledging the unique facets and mileages gained by the top-notch services provided by the ACA Compliance Solution Services, it would be a judicious approach from the ALEs to hire such compliance professionals to acquire hassle-free IRS penalty reduction services.
 
Besides, as these specialists act in harmony with the law firms and insurance agents, the feedbacks of the ALEs are augmented with pragmatic knowledge, and well-coordinated methods.