Will you be able to avoid ACA penalties? Over the next nine years, it’s predicted that the IRS will collect $228 billion in employer mandate penalties. Michelle Capezza explores how the IRS will leverage big data analysis to find inconsistencies in employer reporting ensure Affordable Care Act compliance. Read the entire article here >

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ACA Information Reporting: Ensuring Big Data Analyses Do Not Lead to Big Penalties

Monday, September 19, 2016 – National Law Review

As employers prepare the Affordable Care Act information reporting filings for the 2016 year that will be due in 2017 (notably the 1094/1095 B&C), the good faith standard of compliance, and the potential for inaccuracies, is no longer available.  In order to seek a waiver of penalties for the 2016 filings made in 2017, an employer will need to meet a standard of reasonable cause and no willful neglect.  With this standard, an employer must show that there are significant mitigating factors or the failure was due to certain events outside their control and the filer acted responsibly.  While “responsibly” remains subjective, the employer must be able to demonstrate that the same level of quality assurance and audit rigor that is applied to other governmental reporting must be applied to the 1095 and 1094 IRS reporting processes. Also, at this time, anticipate that the filings will need to be made with the government, and to the employees (and other recipients), under the regular schedule without extensions: (i.e., the disclosures to employees will be due the last day of January following the calendar year in which coverage was provided; forms must be filed with the IRS by the last day of February if filing on paper or March if filing electronically (which is required for employers with 250 plus returns)).

Failure to timely file the Forms with the IRS and provide them to employees can lead to significant penalties (for example, currently large businesses are subject to a penalty of $260 per return up to a maximum of $3,178,500, as adjusting in successive years); this is not tax deductible.

The following is a checklist of issues that employers should consider when getting ready for 2017 ACA information reporting: Read on >