On November 17, the IRS published the Form that Applicable Large Employers must use to respond to IRS letters regarding proposed assessment of 2015 employer mandate taxes. Form 14764 is a paper, mail-in “ESRP Response” that shows the receipt deadline at the top of the Form, along with a number to call to request an extension of that deadline. On page 1, the ALE’s authorized official either accepts IRS collection of the proposed assessment or disagrees (either partly or totally). On page 2, the ALE’s authorized representative may designate another person to provide further information to the IRS regarding the proposed assessment, but may not authorize full representation. That must be done separately. See Form 2848 and its Instructions. There is no space for the ALE to indicate the grounds for its disagreement, nor is there any instruction about the format of or due date for such a submission. Indeed, whether it may be submitted separately is not stated.
However, your IRS notice letter (Letter 226J) should include this set of instructions:
If you disagree with the proposed ESRP
• Complete, sign, and date the enclosed Form 14764, ESRP Response, and send it to us so we receive it by the Response date on the first page of this letter.
• Include a signed statement explaining why you disagree with part or all of the proposed ESRP. You may include documentation supporting your statement.
• Make sure your statement describes changes, if any, you want to make to the information reported on your Form(s) 1094-C or Forms 1095-C. Do not file a corrected Form 1094-C with the IRS to report any changes you want to make to your Form 1094-C filed for the tax year shown on the first page of this letter.
• Make changes, if any, on the Employee PTC Listing using the indicator codes in the Instructions for Forms 1094-C and 1095-C for the tax year shown on the first page of this letter. Do not file corrected Forms 1095-C with the IRS to report requested changes to the Employee PTC Listing; and
• Include your revised Employee PTC Listing, if necessary, and any additional documentation supporting your changes with your Form 14764, ESRP Response, and signed statement.
About the Form 14765, Employee PTC Listing
The Employee PTC Listing shows the name and truncated social security number of each full-time employee for whom you filed a Form 1095-C if:
• The employee was allowed a PTC on his or her individual income tax return for one or more months of the tax year shown on the first page of this letter; and
• You did not report an affordability safe harbor or other relief from the ESRP on the employee’s Form 1095-C for one or more of the months the employee was allowed a PTC.
These employees are referred to as assessable full-time employees.
Each monthly box on the Employee PTC Listing has two rows. The first row reflects the codes, if any, that were entered on line 14 and line 16 of the employee’s Form 1095-C for each month. For each employee, if the month is not highlighted, the employee is an assessable full-time employee for that month.
If the month is highlighted, the employee is not an assessable full-time employee for that month.
Employees who are not considered assessable full-time employees for all twelve months of the year (either because the employee was not allowed a PTC for any month in the calendar year or a safe harbor or other provision providing relief was reported on Form 1095-C for each month the employee was allowed a PTC) are not included on the Employee PTC Listing.
Specific instructions for making changes to the Employee PTC Listing
• If the information reported on an assessable full-time employee’s Form 1095-C was inaccurate or incomplete, you may make changes to the Employee PTC Listing using the applicable indicator codes for lines 14 and 16 that are described in the Instructions for Forms 1094-C and 1095-C. Make any changes, for each employee, as necessary, by entering new codes on the 2nd row of each monthly box.
• When making changes, first enter the indicator code for line 14 and then enter the indicator code for line 16. Separate the two codes with a slash (e.g., 1H/2A).
• If the same indicator code applies for all 12 months of the calendar year, enter that code in the “All 12 Months” column, and do not make entries for any of the months.
• If you are providing additional information about the changes for an employee, enter a check in the column titled “Additional Information Attached.” Otherwise, leave this column blank. NOTE: If more than one indicator code could apply for a month, enter only one code for that month on the Employee PTC Listing. Note any additional indicator codes that could apply for the affected employee in your signed statement. Include the employee’s name, the applicable months and the additional indicator codes for each month. We will review what you submit and will contact you.
Please ensure the signed statement and all documents submitted include the tax year and your employer ID number in the top right corner.
If we don’t hear from you
If you don’t respond by the Response date on the first page of this letter, we will send you a Notice and Demand for the ESRP that we proposed and assessed. The ESRP will be subject to IRS lien and levy enforcement actions. Interest will accrue from the date of the Notice and Demand and continue until you pay the total ESRP balance due.
To this this, you and your representative may need prompt access to your 2015 Forms 1095-C and your enrollment information for that plan year. If that data is hosted by a vendor, verify that access soon, because, just maybe, you’ve got mail.