What's Happening?
The IRS is actively enforcing the Affordable Care Act (ACA) requirements for applicable large employers (ALEs), despite recent layoffs and resignations. ALEs must offer minimal essential coverage and file forms reporting offers of coverage to full-time employees. Noncompliance may result in significant penalties, including the employer-shared responsibility payment. The IRS has been contacting ALEs about noncompliance, and quick action is necessary to avoid or challenge penalty assessments.
Why It's Important?
The IRS's focus on ACA enforcement highlights the importance of compliance for ALEs, as penalties can be substantial. Employers must ensure accurate reporting and retain proof of compliance to avoid liabilities. The enforcement efforts underscore the ongoing challenges of navigating ACA requirements and the potential impact on business operations.
What's Next?
ALEs are advised to review their records and work with experienced professionals to address IRS inquiries and assessments. The Employer Reporting Improvement Act sets a six-year limit on assessing employer-shared responsibility payments, but the statute of limitations for earlier periods remains uncertain. Future litigation may arise over the IRS's interpretation of reporting requirements.
Beyond the Headlines
The enforcement efforts raise questions about the balance between regulatory compliance and business flexibility, and the potential for disputes over IRS procedures. It also highlights the role of legislative changes in shaping employer obligations and the need for proactive compliance strategies.
