January 20, 2016
New Q&As Address How Extended Reporting Deadlines Affect Penalties
The IRS has added new Q&As to its existing webpages for self-insuring employers and other providers of minimum essential health coverage, as well as for applicable large employers (generally those with at least 50 full-time employees, including full-time equivalents), to provide additional information on the Affordable Care Act's information reporting requirements.
Extended Deadline for Correction of Reporting Failures
Among other things, the new Q&As describe how the previous extension of the due dates for 2015 information returns affects the rules for reducing penalty amounts for reporting entities that make corrections by August 1, 2016. Specifically, the Q&As clarify that, because the deadlines for furnishing statements and filing returns with the IRS have been extended, the deadlines for reduction in penalty amounts to correct failures pursuant to Internal Revenue Code sections 6721(a)(2) and 6722(a)(2) also are extended.
Accordingly, for statements furnished to covered individuals and employees, any failures corrected by April 30 and October 1, 2016, respectively, will be subject to reduced penalties. For paper returns filed with the IRS, any failures corrected by June 30 or November 1, 2016, respectively, will be subject to reduced penalties (for returns filed electronically, any failures corrected by July 30 or November 1, 2016, respectively, will be subject to reduced penalties).
These extended dates have no effect on previously provided penalty relief for incomplete or incorrect returns filed or statements furnished. In general, this relief provides that the IRS will not impose penalties under sections 6721 and 6722 for returns and statements filed and furnished in 2016 (to report offers of coverage in 2015) on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements.
You may review the Q&As for self-insuring employers and other providers of minimum essential health coverage in their entirety by clicking here. Click here for the Q&As for applicable large employers.
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