Increase In IRS Penalties
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Small Businesses Threatened With $1,000,000 IRS Fine For Not Filing Affordable Care Act Forms This Year

Businesses that will be filing 1095 forms for the first time in order to remain compliant with the new Affordable Care Act (ACA) filing requirements take note.

This summer the IRS announced an increase in penalties for failure to file correct information returns and provide correct payee statements for information returns filed after December 31, 2015, with maximum penalties on small businesses increasing from $500,000 to $1 million.

In 2016 (for reporting on calendar year 2015) employers and insurers are expected to be compliant with ACA reporting requirements. Incorrect filings will not be penalized for calendar year 2015 filing (reported in 2016) if employers/insurers file on time and make a good faith effort to comply.


    For returns filed before January 1, 2016, Internal Revenue Code (IRC) section 6721 imposes a:

  • $30 per information return if you correctly file within 30 days of the due date.
  • $60 per information return if you correctly file more than 30 days after the due date but by August 1.
  • $100 per information return if you file after August 1 or you do not file required information returns.

Maximum penalties to payers for failure to file correct information returns, including furnishing an incorrect name/TIN to IRS = $1.5 million/year ($500,000 for small businesses); $250/return for intentional disregard with no maximum penalty.

    For returns filed beginning January 1, 2016, Internal Revenue Code (IRC) section 6721 imposes a:

  • $50 per information return if you correctly file within 30 days of the due date.
  • $100 per information return if you correctly file more than 30 days after the due date but by August 1.
  • $250 per information return if you file after August 1 or you do not file required information returns.

Maximum penalties to payers for failure to file correct information returns, including furnishing an incorrect name/TIN to IRS = $3 million/year ($1 million for small businesses); $500/return for intentional disregard with no maximum penalty.