The Internal Revenue Service (IRS) has been sending Letter 5699 to employers that have not complied with their Affordable Care Act (ACA) reporting requirements under Internal Revenue Code Section 6056 for the 2015 calendar year.
Letter 5699, Request for Employer Reporting of Offers of Health Insurance Coverage (Forms 1094-C and 1095-C), requests missing information from applicable large employers (ALEs) that were required to report under Section 6056, but failed to file Forms 1094-C and 1095-C with the IRS. The IRS identifies potentially non-compliant ALEs based on their Form W-2 total employee count reported for the 2015 calendar year.
The IRS began issuing Letter 226-J to certain ALEs that filed Forms 1094-C and 1095-C to inform them of their potential liability for an employer shared responsibility penalty for the 2015 calendar year. Similarly, the IRS has been issuing Letter 5699 as its enforcement mechanism to identify and assess penalties against ALEs that failed to file Forms 1094-C and 1095-C for the 2015 calendar year.
Employers who receive a Letter 5699 should respond to the IRS within the appropriate time frame. When responding to Letter 5699, employers should provide all appropriate information requested by the IRS, including any Forms 1094-C and 1095-C that are due. Keep in mind that penalties may apply for any failures to file with the IRS by required deadlines. The IRS will use information provided in response to Letter 5699 to identify non-compliant ALEs and assess any penalties that may be owed.
For more information regarding Letter 5699 and related ACA reporting penalties, click here.
To learn more about Letter 226-J, you can refer to our previous blog here.