Late Or Incorrect Forms 1095-C: The IRS Provides Relief, But Only For Employers Acting In Good Faith To Comply Or Who Missed The Deadline Due To Reasonable Cause

Nancy K. Campbell • April 14, 2016

Many employers struggled to furnish correct Forms 1095-C to employees by the March 31, 2016 deadline.  Section 6721(a)(2) of the Internal Revenue Code provides penalties for failure to furnish Forms 1095-C to individuals by the deadline.  Although the presumptive penalty is $250 for each delinquent or incorrect return, the penalty amount may be reduced if Forms are furnished or corrected within 30 days of the filing deadline.  Correction within 30 days lowers the presumptive penalty to $50 per return.  If a failure to correct is not made within 30 days, but is made by August 1, the presumptive penalty is reduced to $100 per return.  Upon discovering errors, employers should correct them as soon as possible.

Additionally, the IRS has indicated it will not impose penalties for the 2015 tax year for incorrect or incomplete Forms if the employer can demonstrate that it made a good faith effort to comply with the reporting requirements.  See Q&A-3: https://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Reporting-of-Offers-of-Health-Insurance-Coverage-by-Employers-Section-6056.   This guidance provides that no relief is available for an employer that cannot show a good faith effort to comply with the information reporting requirements or that fails to timely furnish a statement.  In an effort to fall under this relief, many employers rushed to meet the March 31 deadline by sending out Forms by March 31, even if they were incomplete or incorrect.  It’s not clear whether knowingly sending out incorrect or incomplete Forms meets the good faith standard. 

The same Q&A-3 points out that, consistent with existing information reporting rules, employers that failed to timely meet the information reporting requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under Section 6724 are satisfied.  Hopefully, employers who endeavored to provide correct Forms to their employees, albeit a couple days or weeks late, will fall under this reasonable cause penalty relief.  In Notice 2016-4 the IRS indicates that in determining reasonable cause, it will take into account whether an employer made reasonable efforts to prepare for reporting, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. The IRS will also take into account the extent to which the employer is taking steps to ensure that it is able to comply with the reporting requirements for 2016.  And don’t forget, the deadline for furnishing statements for the 2016 calendar year is January 31, 2017.

Employers who intend to rely on either form of relief are wise to keep detailed records of their efforts to comply with the information reporting requirements.  This would include correspondence with service providers showing efforts to meet the deadline or events beyond the employer’s control.

 

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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