ACA reporting is complicated and time consuming in general. When you find that you have incorrect information, like TIN numbers from your employees and recipients, this can be very stressful. You don’t want to get stuck with penalties for reporting information incorrectly, especially when you had no idea that it was incorrect in the first place!
Here are the steps and tips you should follow if you are notified by ACAwise or the IRS that you have incorrect TINs in your reporting.
Why are you getting a TIN Mismatch?
TIN mismatches occur when your employee or recipient’s tax identification number, like a social security number, is run against the SSA database. If the number that your recipient provided does not match the SSA records, this is an incorrect TIN.
Most of the time this is easily fixed, especially if you signed up for TIN matching with ACAwise. This means that our team will run all the recipients’ TINs against the SSN database before your file with the IRS, allowing you time to correct any that are incorrect.
As soon as you are notified of a mismatch you must reach out to the recipient and solicit their correct TIN.
Solicit the TIN from your Recipient
Soliciting your employee’s or recipient’s TIN simply means that you make contact with them and ask them to complete a Form W-4 (employee) or W-9 (recipient), thus providing their accurate TIN.
When your employee or recipient provides their correct TIN you should upload this to your ACAwise account immediately. If you have already filed with the IRS and have had a form rejected or “accepted with errors”, you should notify the IRS. You can do this by filing a corrected Form 1095-C. ACAwise can help you with the corrections process!
You can make a solicitation by phone, mail, or electronically.
The easiest way to record these solicitations is by sending them electronically. However, the IRS suggests that you use more than one method when soliciting electronically, in case the individual does not have proper access to technology.
Proving Reasonable Cause
To avoid penalties with the IRS, you must act. The IRS will not penalize filers who can prove that they had reasonable cause for failing to report a correct TIN, rather than willful neglect.
Following the IRS regulations for solicitations is the best way to avoid IRS penalty notices, like Notice 972CG.
According to the IRS, organizations filing the Form 1095-C can likely avoid penalties for an incorrect TIN, by taking the following steps :
The initial solicitation was made at the time of enrollment.
The second solicitation was made in a reasonable amount of time after the incorrect TIN was identified.
The third (annual) solicitation was made by December 31 of the year following the initial solicitation.
If you haven’t filed yet, but have received a TIN mismatch notification from ACAwise, follow the IRS instructions for TIN solicitations as soon as possible.