Oh no, my ACA forms will be filed late, now what?

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Oh no, my ACA forms will be filed late, now what?First, don’t panic, but move quickly to respond.

It’s not uncommon for employers to encounter situations that may cause delayed filing of required information returns with the taxing jurisdictions, like IRS Form 1095-C. Tax jurisdictions are oftentimes less amicable when the delayed filing was due to procrastination and willful disregard of reporting requirements. However, late filing caused by anything other than willful neglect can oftentimes be appealed to the taxing jurisdiction. Some common situations we have heard about include:

  • Negligence of a former employee
  • Death of the responsible employee
  • Untimely termination (voluntary or involuntary) of the responsible employee
  • Systems (internal or vendor) issues that prevented creation and/or distribution of required forms

The IRS and other tax jurisdictions will often be more forgiving and consider rescinding penalties when the employer can demonstrate that immediate action was taken once non-compliance was realized. For this reason, it’s important to understand the answers to a few key questions.

Q: Will I be penalized for providing forms late to employees?

A: Integrity Data has not seen a penalty assessed to an employer for only the late filing of Form 1095-C to employees. However, we have seen this penalty when it was paired with a penalty for late filing forms with the IRS. Meaning, if you file your forms timely with the IRS, the likelihood of being assessed a penalty is minimal.

Q: Will I be penalized for forms filed late to the IRS?

A: Yes. There is a graduated penalty depending on the lateness of the filing. Therefore, it’s important to remit the required forms as soon as possible.

If you would like to see what your potential IRS late filing penalty might be, try our free Penalty Calculator tool.

Q: If I am penalized, what should I do?

A: Regardless of the type of penalty (late-filing, non-compliance, etc.), we would recommend two actions in this situation:

  1. Contact Integrity Data for a consultation on your specific situation. We can assist with gathering pertinent information to assist with responding to penalty notifications.
  2. Engage legal counsel to assist with drafting a timely response to the tax jurisdiction.

Also, see our blog with more in-depth details about what to expect and how to respond to IRS penalty letters.

Q: If I filed my forms late, what actions should I take to assist with any remediation?

A: There are three things you should do immediately anytime you fail to comply with reporting requirements:

  1. Ensure filing is performed ASAP with the tax jurisdiction if possible, even if forms are not timely filed with employees.
  2. Document specifics around why the filing was late. This should include a summary of the situation, actions taken (including date of action) to get into compliance, and changes implemented to ensure future compliance is maintained.
  3. Gather any supporting documentation from your vendor (i.e. support case information) related to the late filing.

For tips on how to avoid these penalties, see our preventive checklist.

The good news is that we have lots of expertise in this area and are here to help. First, we suggest you review acafluent.com to get up to speed on all things ACA. Then sign up for a free 30-minute consultation, and we’ll do our best to help you with all your ACA compliance needs.

Written by Integrity Data

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