IRS Letters 226J: Having the Right Section 4980H Records Can Be Worth a Small Fortune

As reported in our 2018 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare, the Section 4980H penalties are still in effect and the IRS is enforcing them.  Employers continue to receive Letters 226J, which the IRS uses to propose employer shared responsibility payments. During the Letter 226J process, the IRS has been allowing employers to challenge proposed penalties and to correct reporting errors. However, the IRS will not necessarily accept an employer’s word at face value.

Recordkeeping is key

One of the biggest problems employers may face is finding records to prove they satisfied the 95% offer of coverage test (to avoid the subsection (a) penalty) or that they offered a specified employee minimum value affordable coverage (to avoid the subsection (b) penalty).  Read More ›

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