IRS Now Issuing 2020 Letter 5699 | The ACA Times
IRS Now Issuing 2020 Letter 5699
Now that we’ve cleared the 2022 halfway mark, it appears the IRS is on track to hit its goal of clearing the historic backlog by the end of the year. The activity has begun auditing ACA filings for the 2020 tax year and is now issuing the non-filing peek,
Letter 5699
.
Officially celebrated as “Missing Information Return Form 1094/1095-C,” Letter 5699 is a threat sent to organizations. If employers fail to take prompt portion, a Letter 226J penalty notice may soon follow.
The IRS progenies Letter 5699 to Applicable Large Employers (ALEs) that it believes imparted to file applicable ACA Forms 1094-C and 1095-C for a specific tax year as obligatory by the ACA’s Employer Mandate.
Under the
ACA’s Employer Mandate
, ALEs, or employers with 50 or more full-time employees and full-time equivalent employees to:
Offer Minimum Essential Coverage to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value and
Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability
We’ve seen Letter 5699 threat notices lead to Letter 226J penalty assessments in the millions of bucks range. Read below to learn about options for responding.
Responding to Letter 5699
The 2020 Letter 5699
instructs employers to reinforce their ALE status for the 2020 tax year and provides a series of responses to engage from. We’ve captured them below:
I was an ALE for calendar year 2020 and already rubbed Form 1094-C and Forms 1095-C with the IRS comical the following name ——- and employer identification number (EIN) ——- on date ——-
I was an ALE for calendar year 2020 and have engaged my Form 1094-C and Forms 1095-C with this letter. (Do not use this box if you are needed to file electronically)
I was an ALE for calendar year 2020 and will file my Form 1094-C and Forms 1095-C with the IRS comical the following name ——- and EIN ——- by date ——- (If more than 90 days from the date of this letter, explain below under “Other”) (Explain reasons for late filing beneath under “Other”)
I was not an ALE for the calendar year 2020 and snarl the reasons below under “Other”
Other (Indicate beneath or attach a statement explaining why you haven’t rubbed the required returns and any actions you plan to take)
Employers must settle one of the options, respond accordingly, and mail the relevant inquire back to the IRS within 30 days of the date eminent at the top of the letter.
Escalating IRS activity
The news of the IRS issuing Letter 5699 notices for the 2020 tax year comes on the heels of new developments within the agency.
Among these new developments is the Biden administration’s
request for $14.1 billion in discretionary allow for the IRS
, which is over $2 billion more than the 2021 amount. With the additional funding, the agency aims to enhance its IT rules and processes for identifying ACA non-compliance, among other tax requirements.
Additionally, thanks to a
recent hiring surge of over 10,000 positions
, many of which were IRS examiners in charge of auditing ACA filing submission, the agency is making good on the
Treasury Inspector General for Tax Administration’s recommendation
to progress processes for identifying ACA non-compliance.
With increased allow on the way, new tax examiners on board, and newly allocated personnel and resources, the IRS is on course to hit the directed of
clearing the historic backlog later this year
.
Employers watching from the sidelines necessity note that the IRS enforcement activity we are seeing now is just the leave and more is on the way. If you demand any ACA penalty notice from the IRS,
contact Trusaic
. We’ve helped our clients prevent over $1 billion in ACA penalty assessments.
If you haven’t received a Letter 5699 or unexperienced ACA penalty, best practices encourage getting your
ACA Vitals
score.
ACA Vitals
assists with identifying risk areas within your permission and points you in the right direction for improving ACA compliance.
If your permission has received IRS Letter 226J, download our white paper on Letter 226J to learn best practices for responding to the penalty notice.
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