IRS Penalty Letter Response
Eliminate ACA Penalties with Confidence
Eliminate IRS penalties for letters 226J,
5005-A, 972CG, CP215, and CP504B
Filed Incorrectly or Did Not File/Distribute Penalties
Letter 5005-A
The IRS issues Letter 5005A to employers that did not file their ACA Forms 1094-C and 1095-C with the tax agency and/or failed to distribute 1095-Cs to their employees for a particular reporting year.
Letter 972CG
Letter 972CG is a late penalty notice issued to employers that fail to file Forms 1094-C and 1095-C by the corresponding deadlines for a specific tax year under IRC section 6721.
Letter 226J
The IRS sends Letter 226J to ALEs that have failed to comply with the ACA’s Employer Mandate. It’s triggered when one of the ALE’s full-time employees receives a premium tax credit.
CP215
Civil Penalty 215 demands an employer shared responsibility payment (ESRP) from an employer after the IRS has reviewed an employer’s response to an ACA penalty assessment.
CP504B
Civil Penalty 504B communicates that an employer has an outstanding ACA penalty assessment and the IRS is going to levy the employer’s property in the amount the employer owes.
ACA Penalty Warning and Additional Information Notices
Letter 5699
Before receiving a penalty notice for failing to file or furnish, the IRS will issue precursor Letter 5699, which asks employers to confirm their filing details for a specific tax year.
Letter 5698
The IRS sends Letter 5698 to request more information after an employer has responded to Letter 5699 and informs the employer of their liability regarding Forms 1094-C and 1095-C.
Letter 1865C
Letter 1865C is a notice sent to employers if the IRS cannot process their ACA reporting Forms 1094-C and 1095-C. Some examples include a typo in your company’s name or EIN.
Letter 3064C
The IRS issues Letter 3064C to let employers know that they have decided on a penalty assessment that an employer may have received or to request additional information.
Letter 1948C
The IRS issues Letter 1948C following an employer’s response to penalty notice 972CG. Letter 1948C either waives the penalty by accepting the response or request additional information.
FAQs
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What is a 226J letter?
A 226J letter is an IRS notice that informs employers of a potential Employer Shared Responsibility Payment under the ACA. Trusaic specializes in crafting tailored responses to reduce or eliminate penalties.
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How much can Trusaic reduce my penalties?
We’ve saved our clients more than $1 billion in penalties, with many achieving reductions of 90% or more.
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How does Trusaic handle 5699 letters?
Our team identifies any missing filings, prepares accurate submissions, and resolves discrepancies to satisfy IRS requirements.
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Can Trusaic prevent future IRS notices?
Yes. Our proactive compliance monitoring services identify gaps in your ACA processes, reducing the likelihood of future penalties.
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What's included in your penalty letter response service?
We provide a penalty risk assessment, customized response letters, data corrections, and expert guidance throughout the resolution process.
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What is the employer shared responsibility?
The Employer Shared Responsibility provisions are part of the Affordable Care Act that require Applicable Large Employers (ALEs) — generally employers with 50 or more full-time employees or full-time equivalents — to offer health coverage to their workforce.
Under these rules, employers must:
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Offer Minimum Essential Coverage (MEC) to at least 95% of full-time employees (and their dependents), and
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Ensure that the coverage offered is affordable and provides minimum value, as defined by IRS standards.
If an employer fails to meet these requirements and one or more full-time employees receives a Premium Tax Credit for coverage purchased through the ACA Marketplace, the IRS may assess an Employer Shared Responsibility Payment (ESRP).
There are two types of potential penalties:
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4980H(a) penalty – Applies when an employer fails to offer coverage to at least 95% of full-time employees.
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4980H(b) penalty – Applies when coverage is offered but is either unaffordable or does not meet minimum value standards.
IRS notices such as Letter 226J are used to inform employers of a proposed ESRP and provide an opportunity to respond, dispute the assessment, or submit corrected data. Trusaic specializes in helping employers analyze these notices, correct underlying issues, and reduce or eliminate penalties through a defensible response.
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Does Trusaic offer help with state-level penalties?
Yes, we handle both federal and state ACA compliance issues, ensuring complete adherence to all regulations.
