IRS Notice CP220J is a formal notice sent to employers who are assessed a penalty for failing to comply with the Affordable Care Act (ACA)’s Employer Shared Responsibility Provision (ESRP). This notice indicates a substantial penalty, often reaching up to $250,000, for non-compliance.
Overview of Notice CP220J
Notice CP220J is issued after the IRS concludes its review of Forms 1094-C and 1095-C and determines that an employer has not offered adequate health coverage to its full-time employees and their dependents. This notice includes details of the penalty assessment and instructions for payment or dispute.
Steps to Respond to Notice CP220J
Receiving Notice CP220J requires immediate attention and specific actions:
- Review the notice carefully to understand the penalty details and the basis for the assessment.
- Consult with ACA experts or legal counsel to explore options for response, whether to pay the penalty or contest the findings.
- Respond to the IRS within the timeframe specified in the notice to avoid additional penalties or interest.
Strategies to Prevent Future Penalties
To avoid future penalties under the ACA, employers should take proactive measures:
- Ensure accurate and timely submission of all required ACA forms.
- Implement robust systems for tracking and reporting employee coverage using tools like ACA-Track.
- Regularly review health coverage offerings to ensure they meet ACA standards for affordability and minimum essential coverage.
For further guidance on managing ACA compliance and understanding IRS notices, consider visiting ACA-Track’s dedicated page for businesses.
