What Are The ACA Reporting Penalties That You Should Avoid?

The IRS sent its 226–J letter warning companies that they could face financial penalties if they don't comply with federal ACA employer requirements. Instead of accepting the financial penalty or worse, even ignoring it, employers should talk to each other!

It's not uncommon for cross-departmental communication in corporate America to be pushed aside by the siloed workflows and streamlined efficiency. However, this structure comes with its risks. They ended up paying $1 million in unwarranted ACA compliance fines due to poor internal communication. Therefore, prevent ACA reporting penalties by learning properly about it over the internet.

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The following scenarios may be familiar to you:

Scenario 1

Your benefits staffer diligently filed ACA data according to all established guidelines. She leaves your company several months later to pursue a new career. The IRS has three years to review submitted data and issue a warning. A new employee might not recognize the letter and delay handling it. The letter could also end up in corporate limbo if the mail center is unsure who the recipient should be.

Scenario 2

The 226-J letter ends up in the mailbox of the tax, finance, or accounts payable department. The ACA reporting compliance task is a benefit administration task. Therefore, the tax, financial or AP employee just leaves the letter and plans to forward it to your benefits department later. Then they forget about it.

Scenario 3

Because the company failed to respond to the 226J letter within the specified time, the IRS sends a tax, finance, or accounts payable invoice. The department assumes that the organization is responsible for the entire amount of the bill and issues a check to the department without consulting the appropriate people from the benefits department.