IRS Penalty 1094C-004-01 is assessed against employers who submit Form 1094-C with the wrong tax year indicated. This error can lead to significant confusion and delay the processing of essential ACA-related information.
Importance of Correct Tax Year Reporting
Accurately reporting the tax year on Form 1094-C is critical because:
- It ensures that the IRS processes the information for the appropriate year.
- It avoids discrepancies in employer compliance records and potential conflicts with other tax documents.
Effects of Incorrect Tax Year Reporting
Submitting Form 1094-C with an incorrect tax year can result in:
- Rejection of the form, requiring resubmission and potentially incurring additional delays.
- IRS penalties for non-compliance and incorrect submissions.
Corrective Measures for Penalty 1094C-004-01
If your organization is penalized for incorrect tax year reporting, take the following steps:
- Immediately correct the tax year on Form 1094-C and resubmit the form to the IRS.
- Review your internal processes to ensure accuracy in future filings.
- Consider using compliance tools that automatically check for such errors before submission.
Preventing Future Errors
To avoid similar issues in the future:
- Double-check and confirm tax year information prior to submission.
- Implement a robust review process for all tax-related documents.
- Use ACA-Track for automated compliance checks and safeguards against common reporting errors.
For further details on managing IRS penalties and ensuring accurate tax filings, visit Common 1094 Error Codes.
