IRS Program Analysis Urges More ACA Compliance Time

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The period for voluntary compliance with the reporting of health coverage under the Affordable Care Act should be extended to 2015 reporting in 2016, the Information Reporting Program Advisory Committee recommended in a report.

Reporting is voluntary for 2014, but for 2015 employers with at least 50 full-time equivalent employees are to use the forms to report whether coverage offered to employees meets minimum value and affordability standards.

General transition relief also should be extended for this period, the report said. Voluntary compliance is likely to be low in 2014 because final forms and instructions were released late, which would not give employers enough time for system testing and design, the report said.

The forms for the information reporting, required under tax code Sections 6055 and 6056, were released July 24 as drafts by the IRS. The agency also released draft instructions for the forms Aug. 28.

Additionally, the IRS should continue to work with IRPAC on third-party sick pay reporting issues. The IRS created Form 8922, Third-Party Sick Pay Recap, and plans to accept paper recap forms for tax year 2014 filed in 2015, the report said.

Among other recommendations:

•The IRS should provide an electronic version of Form 8922, Third-Party Sick Pay Recap, for the 2015 filing season. The IRS released a draft of the form and instructions July 18, following a recommendation by IRPAC that such a form be created because of the new wage reporting system implemented by the Social Security Administration in 2014.

•Because many employers have shown difficulty in correctly completing Form W-9, Request for Taxpayer Identification Number and Certification, the IRS should make the form easier to understand by referencing line numbers on Form W-9 and providing clearer form instructions, the report said. The confusion can sometimes result in unnecessary correspondence between those requesting Forms W-9 and payees. In some cases, the IRS has required unnecessary backup withholding.

The “2014 Information Reporting Program Advisory Committee (IRPAC) Public Report” is available at the IRS website.