Garrett Fenton Comments IRS Flexibility on ACA Reporting Deadlines in SHRM Online
Garrett Fenton commented on a recent announcement by the IRS providing flexibility on ACA information return filing deadlines. The bulletin says employers may still file information returns even after the June 30, 2016 filing deadline has passed, and that employers will not be penalized if they made "legitimate efforts" to register with the IRS and file the forms on time as long as they forms are submitted "as soon as possible." Determining what activities meet these requirements can be challenging. "What constitutes a good-faith effort is always the crux. Employers will want to document their compliance efforts so they can support the argument that they did all they could, but there is no magic formula for what 'good faith' means for that purpose," Fenton said. Regarding how the IRS treats future reporting deadlines, "we've seen in other situations under the ACA where there's been a lenient policy for the initial year, as a transition period with soft enforcement, with the next year being ramped up to full-blown strict enforcement," he said, however "the lenient policy is sometimes extended to the next year's filing." Fenton said whether the IRS will do the same with next year's 1094-C filing may depend on how well compliance was achieved this year. "If there are a lot of employers struggling with this, it's possible [that soft enforcement] could be extended by another year or even two. In other situations, the IRS has taken a hard line and said, 'We gave you a year, we're not giving you any more,'" he said. "That's certainly foreseeable, too."