IRS Notice 972CG- Proposed Penalty- Failure to Comply with Affordable Care Act Reporting Compliance

IRS Notice 972CG- Proposed Penalty- Failure to Comply with Affordable Care Act Reporting Compliance

IRS uses Notice 972CH to notify an employer of a proposed penalty for filing ACA Forms 1094/1095 late, or filing on incorrect media, or filing with incorrect TIN/Name under IRC 6721.

How to Respond to the Notice 972CG?

Employers who received Notice 972CG from the IRS must respond within 45 calendar days from the notice date. Foreign filers can file within 60 days. If you need more time, submit a written request to the address listed on the notice. The request must be sent before the end of the 45 or 60 day period.

Employers must Send in the portion of the payment or correspondence slip (response) which is appropriate to them. And employers must sign and submit the payment if they fully or partially agree to the proposed penalty.

The employer must submit a written statement if seeking a waiver of the proposed penalty. The statement should state the specific provision under which the waiver is being requested.

The facts claimed as the basis for reasonable cause and that the filer acted in a responsible manner for each missing/incorrect TIN took place in the time and manner required by regulations.

The written statement must contain the signature of the person required to file the return, and the declaration made under penalties of perjury.

To get the additional explanation or information, the IRS may issue Letter 1948C to support the request to waive the proposed penalty. The IRS will reject the waiver request if the employer doesn’t respond by the time indicated in the Notice.

If the given explanation was accepted the IRS will issue Letter 1948C as a note of acceptance and the applicable penalty will not be charged.

A penalty will be charged if the written statement does not have a reasonable cause. The IRS will send Letter 854C explaining the reason for the denial, including the filer’s appeal rights. The IRS will charge the full amount of the penalty if there is no response to the Notice 972CG within 45 days. Also, a balance due notice (CP15 or CP215) including the appeal rights being issued.

What about Penalty Rates for not complying with the IRS?

Under IRC 6721(a) and IRC 6722(a), IRS determines the penalty from $50 to $100 for each return for late filing and it raises to $260 per form for those filed after August 1st.

The Notice 972CG also indicates penalties of $260 per form for not filing of 1095 Forms electronically when required, and for TIN validation errors.

If you need any additional information about penalties Notice 972CG, see Publication 1586.

What are your options?

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What is my first step?

If you received a letter or notice, a decision has to be made. Do you feel confident to handle this situation on your own? If it is a simple issue and you already know the answer, call or write them. If the issue is more complicated, you need to hire a Certified Tax Resolution Specialist. The IRS or State will take full advantage of your lack of knowledge and experience.

What is Your Next Step?

The next step is to determine if the notice was sent in error. Do you have an outstanding tax liability? Do you have unfiled or incomplete returns?

Is There a Time Limit?

Yes, each letter or notice from the IRS or State will indicate a date that you MUST to contact them by. If you need more time, call the number on the notice or letter and request an extension. DO NOT ALLOW the time to expire without contacting them or hiring a representative to contact them for you.

What You Don’t Want to Do!

What you don’t want to do is nothing. Your tax problems will only get worse if you ignore them. If you cannot pay, there are a number of potential solutions available to those who are otherwise in compliance. In compliance means having all tax returns filed and any balances paid or on a payment plan. If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist.

Get Some Help

If you don’t know how to address the issue(s), have unfiled return/unpaid balances or just done feel confident, let the experts at Legacy Tax & Resolution Services represent you. Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly. Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.