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ACA Penalties among IRS’s Critical Activities

Accounting Support • Jan 15, 2021
The internal revenue service IRS announced to update their services on December 1, 2020. They declared to process critical functions that are related to their mission.
ACA Penalties among IRS’s Critical Activities

The internal revenue service IRS announced to update their services on December 1, 2020. They declared to process critical functions that are related to their mission. Assessment of the employer's ACA mandate penalty was among the process.

Due to the Covid-19 pandemic, the agency did not provide its services for some time. During this period, they accrued a backup of mailing notices. To save money and time, the agency decided to mail any notices with their response dates and previous payment dues instead of generating new bills and notices.

The company stated that the processing of the various notices and letters would be done within 40 days. In simple words, they would receive and open your mail within the next 40 days after sending it. Moreover, the processing time of responses has extended to 60 days according to the IRS statement.

To fix the time problem, there would be a Notice 1052 attached with any letter, notice, or bill. The IRS introduced this notice to increase the responding and payment period to help the employer. Here are some instructions by the agency that will help you to proceed with late penalty assessment, notices, and letters:

  • For ensuring whether there is a new date or not, read the last page of the insert
  • If you have done with the steps to solve the problem, then don’t do anything with the notice
  • If you have any queries, contact us through the phone number that is mentioned on the notice. Remember one thing, you may get busy phone lines as the agency continues its operations

In April, the IRS resumed their mission-critical functions and it is processing requests continuously. For resolving the issue of the ACA penalty assessment, the agency issued a Letters 226J to employers. This letter is issued for the 2018 tax year in which they identified employers who did not obey the employer mandate.

In conjunction with Applicable Large Employers (ALEs), Employee Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate, and firms with more than or equal to 50 full-time employees or full-time equivalent employees, there is a reminder for employers. There should be at least 95% of employee’s full-time manpower Minimum Essential Coverage in which coverage meets the Minimum Value (MV) that is much affordable for the employee. Otherwise, the organization would face IRC 4980H penalties. Employees whose per week hours are 30 or more would also consider as a full-time employee

You should be careful about timing if your organization receives penalty notice, 226J letter from the agency. Many other functions at the end of the year require to be solved immediately. 


IRS agency works to collect proper tax revenue by applying tax laws based on fairness and justice. Due to the covid-19 pandemic, this agency can’t perform its duties efficiently. However, they were processing tax returns, payments, refunds, and mails within 40 days. In this article, we have discussed penalties that would be faced by employers in case of going against the tax laws. If you own an organization, then this article would be helpful for you to prevent ACA penalties. For further updates, stay connected with us!

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