When you open your mailbox, there are some things that you are excited to find waiting for you, however, the Letter 5699 is not going to be one of those. The IRS has been distributing these letters to non compliant employers in regards to their ACA reporting.
Here is what you need to know to keep one of these letters out of your mailbox…and what to do if you have already received one.
What is Letter 5699?
As aforementioned, this is a notification letter from the IRS letting you know that you have failed to comply with IRS Section 6056.
Section 6056 requires all Applicable Large Employers (ALE) provide health insurance coverage that meets the minimum essential coverage standards to eligible full-time employees.
This section also requires that these employers must report this information to the IRS using 1094/1095-C and furnish their employees with a copy as well.
If you have received this letter from the IRS, they are missing important information from you and therefore find you noncompliant.
What are your options?
This letter will provide you with five options. You should choose the one that is most accurate to your situation.
I was an ALE for the calendar year and have already filed Forms 1094/1095-C with the IRS under the following name (enter name here) and EIN (enter EIN) on this date (enter date).
I was an ALE for the calendar year and have included my Forms 1094/1095-C with this letter.
I was an ALE for the calendar year and will file my Form 1094-C and 1095-C with the IRS using the following name (enter name) and EIN (enter EIN) by date (enter date)
*If you are submitting the forms more than 90 days from the date of receiving this letter, you will need to provide an explanation as well.
4. I was not an ALE for the calendar year. You will have to provide an explanation.
5. Other- using this option, you can explain your situation to the IRS if none of the others apply to you. You will need to attach a written statement.
When should I respond?
You must respond to this letter within 30 days of receiving it. If you fail to respond, you are essentially one step closer to being hit with IRS penalties. It is always better to respond to the earlier IRS notifications rather than waiting until they assess a penalty against you. At that point there is little room for any negotiation.
What if I don’t respond?
This is not a good option, it’s actually the worst move you could make with the IRS. By responding and explaining your situation, you can work out a plan to complete your reporting so that is complete and accurate. The IRS responds positively to employers that act in good faith.
ACAwise has a Solution!
We know that dealing with potential IRS penalties can be stressful! Getting a Letter 5699 in the mail can make your heart drop. Don’t worry, our team of experts is here to help you. Not only can we advise you on how to respond to the IRS but we can help you clear up the issues with your ACA reporting.
We offer prior year filing, so if you forgot to file in past years or filed incorrectly, we can resolve that. We even have an ACA Penalty Calculator to help you determine the potential penalties you are looking at.