IRS Affirms Employer Mandate Enforcement Efforts


August 20, 2019

On June 28, 2019, the IRS sent a letter (number 2019-0008) to Senator Susan Collins, reaffirming that they will continue enforcing the employer mandate. Senator Collins, on behalf of several of her constituents, had written to the IRS asking whether the IRS might waive or reduce employer mandate penalties based on hardship or other factors. Senator Collins had also asked whether the IRS might be willing to extend transition relief for employers with fewer than 100 employees.

In the letter, the IRS, via Associate Chief Counsel Victoria Judson, responded by saying that the employer mandate does not provide for a waiver of penalties. The IRS also stated in the letter that no transition relief is available for 2017 and future years.

The letter also addresses a January 20, 2017 White House executive order directing federal agencies to exercise authority and discretion permitted to them to waive, defer, grant exemptions from, or delay regulatory burden imposed by the ACA. The IRS states that the legislative provisions of the ACA are still in force until Congress changes them, and therefore taxpayers (employers, when it comes to the ACA’s employer mandate) must follow the law and pay what they may owe.

The letter contains no new employer obligations, but does serve as a reminder that the IRS continues to enforce the ACA’s employer mandate. Recently, employers have been receiving letters from the IRS for failure to comply with the employer mandate and for late-filing the related forms (Forms 1094/95-C). Employers should continue to diligently comply with the employer mandate and reporting.