You’re feeling pretty secure in your relationship with the beloved ACA 1095 forms. You made it through the apprehensive early days of getting to know the requirements and submitted all of your documentation, on time. Things were going so well . . .And then it happens—The IRS rejects your 1095.
You’re confused because you thought you were doing everything right. What can you do to patch things up? Unfortunately, we haven’t found ironclad answers. The best advice is to consult legal counsel. In the meantime, making and documenting efforts to comply would be wise.
What if we are trying to obtain the correct information from the individual listed on the 1095, but we have not received what we are requesting?
Document all your efforts to obtain the correct information. The IRS provided guidance (see resources below) on how often and when to solicit individual Social Security numbers, also called Taxpayer Identification Numbers (TINs).
If your organization sent out the 1095 forms but is not the employing entity, reach out to the employers to see if they can supply the correct information. Reach out to individuals or ask the employers to contact individuals to request their correct information.
What if we are sure the information we originally submitted to the IRS on the 1095 is correct?
Document evidence supporting your belief you have not made an error.
What if we can’t even figure out what it is the IRS thinks is in error?
That’s a tough one—You can’t correct a mistake if you don’t even know what it is. Do your best to figure it out and, again, document those efforts. This might involve attempting to contact the IRS or requesting advice from a professional advisor such as your accountant, consultant or attorney. Document the question(s) you asked, what you were told, by whom and when.
Thorough documentation and recordkeeping will go a long way in showing you were not willfully negligent but rather made reasonable good-faith efforts to file accurate and timely 1095s and to correct errors identified by the IRS.
There is no guarantee you will not ever be penalized if the IRS says you made errors. However, if you do nothing in response to IRS notification of errors, or if you knowingly file inaccurate, incomplete information without attempting to find the correct information, you are in a less defensible position than if you made good-faith efforts to obtain and file accurate information.
Go ahead and comfort yourself with a pint of Häagen-Dazs, but, remember, tomorrow’s a new day.
Information Reporting on Minimum Essential Coverage, Notice 2015-68; IRS, October 2015 (Scroll down to Section 2.a. under “Guidance.”)
Information Reporting of Minimum Essential Coverage; Final Rule; Federal Register, 79 FR 13223, March 10, 2014
Information Reporting … and Other Issues Under Section 6055; Notice of Proposed Rulemaking; Federal Register, 26 CFR Parts 1 and 301, August 2, 2016
IRS Clarifies Several Issues Related to Section 6055 Reporting in Proposed Regulations, Miller & Chevalier, August 1, 2016
Proposed Regulations Clarify TIN Responsibilities and Create New Important Questions, Accord Systems, LLC, August 2016
Lois Gleason, CEBS
Manager, Reference/Research Services at the International Foundation
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.