Taxpayer Advocate:Go Easy on ‘Good Faith' Employers on ACA

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By Laura Davison

April 15 — The IRS should be light-handed in imposing penalties on employers that don't meet the Affordable Care Act filing requirements this year, Taxpayer Advocate Nina E. Olson said.

The Internal Revenue Service hasn't done enough to provide guidance and answer employers' questions about how to submit forms to the government and workers about health coverage, Olson said April 15. The process, akin to distributing Form W-2 information, is mandatory for the first time this year.

Agency officials have said that any employer that puts forth a “good faith” effort to comply won't be hit with the penalties, which could be as high as $6 million if the employer didn't send the correct information returns to the IRS or provide employees with health care coverage statements.

Olson said this vague definition of compliance is causing anxiety among employers that are worried they will get hit with a penalty and then have to prove to the IRS they did their best to comply with the law.

“It’s just not clear what the IRS’s position is going to be on that,” Olson told reporters after a House hearing. “It’s creating a level of anxiety that I don’t think we needed to have. We could’ve avoided this level of anxiety.”

Frequently-asked-question pages on the website or notices could help employers understand how the IRS is framing their thinking, Olson said. “We want to see more guidance, even if it is put out there in a temporary format,” she said.

In December, the IRS extended the deadlines by several months to give employers more time to check for mistakes in the data and produce the forms. Employers have until May 31 to submit the documents to the IRS for those not filing electronically, and June 30 for electronic filers—versus the previous Feb. 29 due date for paper filings, and March 31 deadline for digital returns.

For More Information

For more information, see Compensation and Benefits Library’s Tax Aspects of Health Plans Under the Affordable Care Act chapter.

To contact the reporter on this story: Laura Davison in Washington at

To contact the editor responsible for this story: Brett Ferguson at