IRS Code 1094C-027 is generated when an employer erroneously reports zero employees on Form 1094-C. This mistake can lead to significant compliance issues under the Affordable Care Act (ACA), potentially affecting the employer’s obligation and liability.
Consequences of Reporting Zero Employees Incorrectly
Incorrectly reporting zero employees can have several adverse effects:
- It may indicate non-compliance with ACA coverage mandates, leading to audits and penalties.
- It disrupts the accurate assessment of an employer’s size and applicability of the employer mandate.
- It can cause confusion and delay in the processing of ACA-related information by the IRS.
Common Reasons for Incorrect Zero Reporting
This reporting error typically occurs due to:
- Administrative oversights or data entry errors.
- Misunderstandings about how to report employees who are not full-time but are covered under the ACA.
- Technical issues with ACA reporting software or data integration errors from payroll systems.
Correcting Zero Employee Count Errors
To resolve this issue and ensure compliance, employers should:
- Conduct a thorough audit of their employee records to verify actual employee counts.
- Amend the Form 1094-C to accurately reflect the correct number of employees and resubmit it to the IRS.
- Implement checks and balances in their reporting processes to prevent future occurrences.
Tools and Resources for Accuracy
Employers can use tools like ACA-Track to ensure accurate and compliant reporting. For additional guidance:
- The Official IRS website provides detailed instructions on ACA reporting requirements.
- The Common 1094-C error codes page helps identify and rectify common reporting mistakes.
