MENUMENU
  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR

  • LOGIN
  • SIGN UP FREE

HR Morning

MENUMENU
  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • More
    • Leadership & Strategy
    • Compensation
    • Staff Administration
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • Employee Services
    • Work Location
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans

Get a Letter 227? IRS’ new online tool to navigate the wave of ACA penalties

Jared Bilski
by Jared Bilski
June 6, 2018
2 minute read
  • SHARE ON

Now that employers have been notified of their potential ACA shared-responsibility penalties by the IRS, the agency is offering guidance on how they should respond. And HR pros will definitely want to take note of their options.
The IRS just created a webpage titled Understanding Your Letter 227, a reference to the correspondence some employers may receive regarding an assessment of an employer-shared responsibility penalty under Code § 4980H.
The Letter 227 phase of the agency’s recent ACA penalty efforts is the stage that follows the initial Letter 226J notification. For reference, Letters 226J were sent out in late 2017 and applied to the 2015 calendar year or the reporting that was done in 2016.
The 226J Letters were based on info reported to the IRS on Forms 1094-C and 1095-C as well as the agency’s records of who received a premium tax credit.
After receiving a 226J letter, employers were required to respond with a Form 14764 on whether they agreed or disagreed with the IRS’ proposed penalty.

Not a bill

With its Letter 227 series, the IRS will acknowledge the employer’s response to the 226J, explain the outcome of its review and offer the next steps that will full resolve the situation for the company. In total, there are five different versions of Letter 227.
It’s worth noting that only two of the 227s require a direct response from the employer, which must be provided by the date stated on the letter. The IRS also reminds employers that the Letter 227 is not a bill. For the collection of penalties, the feds will be sending a separate document, Notice CP 220J.

What’s included

Here is what the five Letters 227 contain (samples of each are on the IRS site):

  • Letter 227-J states that the proposed penalty amount will be assessed because the employer agreed with the proposed penalty. No response is required to this version of the letter, and the case is deemed closed.
  • Letter 227-K shows that the penalty has been reduced to zero. No response is required to this version of the letter, and the case is deemed closed.
  • Letter 227-L shows that the proposed penalty amount has been revised. This version of the letter includes an updated Form 14765 (Premium Tax Credit (PTC) listing) and revised calculation table. Employers agree with the revised penalty, request a meeting with the IRS, or appeal the determination.
  • Letter 227-M shows that the penalty amount did not change. This version of the letter also includes an updated Form 14765 (PTC listing) and revised calculation table to the extent any data used in the computation of the proposed penalty amount changed based on information provided by the ALE. The ALE can agree with the revised penalty amount, request a meeting with the IRS, or appeal the determination.
  • Letter 227-N acknowledges the decision reached by the IRS appeals office and shows the resulting penalty amount. No response is required to this letter, and the case is deemed closed.

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES

Keep Up To Date with the Latest HR News

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

Sign up for a free HRMorning membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
HR Morning Logo
  • Facebook
  • Twitter
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • HR Technology
  • Performance Management
  • Leadership & Strategy
  • Compensation & Payroll
  • Policy & Culture
  • Staff Administration
  • Wellness & Safety
  • Staff Departure
  • Employee Services
  • Work Location
  • HR Career & Self-Care

HRMorning, part of the SuccessFuel Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

preloader