The Internal Revenue Service (IRS) is currently issuing Letter 226-J to certain applicable large employers (ALE) – generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year – it believes owe a penalty for failing to comply with the Affordable Care Act’s employer shared responsibility provisions (‘Pay or Play’ provisions).
Employers have the opportunity to respond before the ‘Pay or Play’ penalty assessment. In conjunction with Letter 226-J, employers will receive Form 14764, which they can use to respond to Letter 226-J. Employers who submit Form 14764 to the IRS will generally receive one of 4 letters back:
• Letter 227-J: acknowledges receipt of Form 14764 and the employer’s agreement to pay the penalty;
• Letter 227-K: acknowledges receipt of Form 14764 and shows that the penalty has been nullified;
• Letter 227-L: acknowledges receipt of Form 14764 and shows that the penalty has been revised; or
• Letter 227-M: acknowledges receipt of Form 14764 and shows that the penalty amount did not change.
Check here for additional information about IRS ‘Pay or Play’ penalty letters.
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