IRS Letter 5698 is issued to employers to alert them of potential non-compliance with the Affordable Care Act (ACA) filing requirements. This notification typically precedes more formal penalties and is intended as a proactive measure to encourage compliance before further action is taken.
Purpose of IRS Letter 5698
Letter 5698 is sent when the IRS detects irregularities or the absence of required ACA documentation, such as Forms 1094-C and 1095-C. The letter serves to inform employers that they may be out of compliance and need to take corrective actions.
Responding to IRS Letter 5698
Upon receiving Letter 5698, employers should:
- Review the letter carefully to understand the specific issues identified by the IRS.
- Assess their ACA filing records to confirm the presence or absence of the required submissions.
- Prepare and file any missing or corrected forms promptly to avoid penalties.
- Consider consulting with ACA compliance experts or legal counsel to ensure that all regulatory requirements are being met.
Strategies to Avoid Future ACA Compliance Issues
To prevent future notifications and potential penalties related to ACA compliance, employers can adopt several strategies:
- Implement a robust ACA compliance monitoring system like ACA-Track to ensure accuracy and timeliness of filings.
- Regularly train HR and payroll staff on ACA compliance requirements and updates.
- Schedule regular reviews of ACA filings before submission deadlines to ensure all information is accurate and complete.
For more information on navigating ACA compliance and IRS notifications, visit ACA-Track’s service descriptions.
