ACA Penalties Are Coming

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ACA Penalties Are ComingThe political climate what it is, many employers have been holding out hope for penalty relief for not offering coverage, not offering affordable coverage and for not filing the necessary ACA forms with the IRS. The most recent legislation that was pulled for consideration in the House of Representatives would have provided relief to employers for not offering coverage and for not offering affordable coverage for the 2016 filing season, but not for non-filing. Despite the rhetoric and given the fact that a bill is not currently moving in congressional committee, and with the recent report from the Treasury Inspector General for Tax Administration (TIGTA), Affordable Care Act: Assessment of Efforts to Implement the Employer Shared Responsibility Provision, it’s clear that now is the time to comply.


This report updates the public on an audit performed by TIGTA on the IRS systems and processes that validated the ACA information returns (e.g. 1094/1095-B’s/C’s). In it they found that

“some of the processes did not function as intended, which resulted in the IRS not having accurate and complete data for use in its compliance strategy to identify noncompliant employers potentially subject to the Employer Shared Responsibility Payment. In addition, due to system errors, the IRS was unable to process paper information returns timely and accurately. As of October 28, 2016, almost five months after the May 31 filing deadline, the IRS estimated that approximately 16,000 paper Forms 1094-C and 1.4 million paper Forms 1095-C had not been processed.”


In this report, the TIGTA stated that “the IRS’s implementation of the post-filing compliance validation system was initially scheduled for January 2017 but has been delayed to May 2017.” This new system, known as the ACA Compliance Validation (ACV) system, will be coming online soon and will provide the IRS with the ability to identify non-compliant employers. A lack of funding for the development of these systems has delayed its completion and provided for an atmosphere that lulled employers into complacency in relation to their ACA compliance strategy.


It is clear that the IRS is moving forward with a plan to assess non-compliant employers with the legislatively dictated penalties in the near future. These penalties will be substantial. Remember, it’s not too late to comply. While you may have missed the filing deadlines, a late-filing penalty will be a fraction of the penalty for intentional non-compliance. Contact our team today to find out how you can easily use the Integrity ACA solution to meet your ACA compliance needs by emailing us at or by phone at (217) 732-3737. Our website has a plethora of ACA educational information and you can sign up for one of our regular webinars to get a first-hand look at our solution.


Note: The Treasury Inspector General for Tax Administration (TIGTA) was established under the IRS Restructuring and Reform Act of 1998 to provide independent oversight of IRS activities. TIGTA promotes the economy, efficiency, and effectiveness in the administration of the internal revenue laws. It is also committed to the prevention and detection of fraud, waste, and abuse within the IRS and related entities.

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