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1095 Audit




"1095 Reporting—What You Don’t Know
Could Be Expensive"

by Howard M. Gerver
President of ACA Managed Services

Employers that failed to file or made errors on Forms 1095-C to every employee and 1094 submissions to IRS face stiff penalties. This article describes likely IRS audit red flags and potential risks in three areas.

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Do you really have 100% confidence your 1095s from 2015 and/or 2016 are correct?  Are you prepared to pay a penalty up to $250 for each missing or incorrect form?  Only you know the answer.  To mitigate your risks before you hear from the IRS, you may want to strongly consider a 1095 audit.

After several years of ACA penalty inertia the IRS recently announced vis-a-vis updates to its FAQs, non-complying Applicable Large Employers should expect to receive penalty letters by late 2017. While this is not welcome news for employers, employers that did not comply really shouldn’t be too surprised as the IRS among other governmental agencies generally enforce rules, and ultimately collect the respective penalties they are due.

Please Read Our November 10, 2017 Blog Entry

Now is the time to consider a self-audit of 1095-C reporting, as well as organization of documents that may be needed to prepare a response and/or appeal to the IRS. If the ALE does not respond to either Letter 226J or Letter 227, the IRS will assess the amount of the proposed employer shared responsibility payment and issue a notice and demand for payment, Notice CP 220J.”

While “at-risk” employers should be concerned, there’s another contingent of non-filing employers that should be relieved. Who is this? These are the employers that neither furnished 1095-C forms to either eligible or enrolled employees nor submitted their respective 1094-C transmittal to the IRS.

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Everything you'd like to know about the benefits of our 1095 audit services

It’s really quite simple –

  • The regulations are complicated
  • ACA IRS reporting is new
  • Fines and penalties are very high
  • Vendors haven’t audited their own products
  • There are many moving parts
  • Your job could be at risk

Since your employer/vendor just recently processed these forms the information should be readily available.  If you’re seeking a sample-based audit, our sample audit report can be delivered in less than 4 weeks.  If you’re seeking a 100% data compare audit, than this will likely take more time unless all of the data can be furnished right away.

That all depends upon the comprehensive nature and integrity of your data and well as the importance of quality assurance to your 1095 vendor or software company that is producing your forms.

Given the complexity of ACA IRS reporting you really need a specialist that understands all the nuances of the regulations.