Letter 5005-A – ACA Reporting Penalty

Needs Attention: Penalty Notice – ACA Reporting

What It Means:

The IRS sends Letter 5005-A to large employers that have not met their Affordable Care Act (ACA) reporting requirements. It’s typically sent to those who fail to file Form 1094-C and Form 1095-C with the IRS, or did not send Form 1095-C to its employees. This letter is not a bill, but a notice of proposed penalty fees.

Next Steps:

Carefully review your Letter 5005-A. It may be accompanied by a Form 886-A, which will detail the reasons for the proposed penalty fees.

What to do next:

Do not ignore the letter. Failure to respond will result in higher penalties and interest, as well as more aggressive collection actions.

Speak to a tax professional. ACA regulations can be intimidating and complex. Seek a tax specialist who can get your company back into compliance and address the proposed penalty.
Pay the penalty. If you agree with the penalty assessed, you should pay the amount by the deadline date to avoid additional fees.

If you dispute the penalty, you can file an appeal after the IRS sends a formal payment request.

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