Alert: IRS Issuing Penalties to Employers who Fail to Distribute 1095-C Forms to Employees and who Fail to File 1094/1095-C Forms with the IRS

While IRC 4980H penalties for not offering required ACA health coverage remain in effect, the IRS is beginning to send employers a new set of penalties.

The final days of 2018 have seen the IRS begin assessing penalties to employers who have failed to file forms 1094/1095-C with the IRS timelyand accurately, or who have failed to provide 1095-C forms to employees. These penalties are being administered under IRC 6721/6722 and this is the first year the IRS has begun issuing such penalties.

The proposed penalty assessments for failing to file (or filing incorrectly) the 1094-1095-C forms, or for failing to provide employees with the 1095-C form, are indexed each tax year. The following link highlights the IRS’ penalty rates and, as you can see, the penalties can be quite high.

MSC seeks to keep its clients aware of the penalties and risks concerning important compliance updates. While there hasn’t been a large number of penalty assessments under IRC 6721/6722 to date, we think it is prudent to understand the risks surrounding this penalty, and to speak with your own tax attorney or CPA in helping you to avoid receiving a potential, and costly, IRS assessment.

This message is for informational purposes and is intended to provide our clients with important compliance updates.