As the deadlines for the first year of ACA mandatory reporting to the IRS quickly approach, organizations should have already identified their ACA reporting obligations under IRC 6055 and/or 6056. No matter your organization’s specific obligations for the ACA under those codes, one thing remains consistent: The AIR System electronic transmittal to the IRS.
The electronic transmittal to the IRS via the AIR System remains the hardest piece of this new tax information reporting obligation, according to many tax and compliance professionals already familiar with tax information reporting and the existing IRS FIRE System used for other 10-series tax forms. In fact, many vendors offering ACA reporting solutions have announced that they won’t be able to help organizations with this required IRS transmittal.
For more information about the complexities around building an AIR System electronic transmittal, please see our recent posts:
- Top Ten Things to Know About AIR Testing and ACA Reporting Compliance
- Sending Your ACA Data Through the IRS AIR Testing System
- AIR Testing and ACA Reporting: Additional Important Information
Lessons Learned from ACA Beta Tax Year 2014
A difficult part of this new mandatory reporting tax obligation is ensuring the fields of the required 1094/1095 forms are accurate and filed on time using the correct transmittal feed to the IRS AIR system. This is critical to avoid costly fines and penalties and alleviate damage to your reputation, not to mention prevent disruption to your business and dissatisfaction amongst your employees.
As an organization with 30 years dedicated to tax information reporting, we wanted to share our lessons and insights learned from the initial beta year.
Moving Forward into Tax Year 2015 for ACA Mandatory Reporting
There are also a multitude of technical considerations the IRS has recently published that are worth sharing for any organization still considering an internally built solution or who are unsure about how they will respond to these new requirement. For instance:
- In the Affordable Car Act Assurance Testing (AATS) environment, the error message file will not be included for a “Rejected” status in Tax Year 2014.
- Note: The error message file will be included in AATS Tax Year 2015.
- For “Rejected” status, you can contact the AIR mailbox at the IRS. You will need to provide a Receipt ID with your request.
- For “Accepted With Errors” status, review the scenario, correct the data, and resubmit.
- For “Accepted” status, contact the IRS Help Desk at 866-937-4130 to be moved from Test to Production.
- Verify the correct SOAP version is being used; currently, it should be SOAP 1.1.
- Once you have passed AATS, you must use the Production “P” Transmitter Control Code (TCC) for issuer or transmitter.
- When logging onto the IRS Registered User Portal (RUP), make sure you are selecting the correct test or production environment.
These are significant points for Tax Year 2015 ACA mandatory reporting that you need to know how to handle in order to process your transmittal to IRS properly in order to avoid costly delays and potential exposure to penalties.
Whether you are compiling your information to submit in-house or you are using a third-party vendor, it is important to note that not everyone is equipped to handle the necessary transmittal to the IRS. Do you have a comprehensive plan and the capabilities in place that account for this crucial and mandatory reporting steps?
Have questions about the technical components of transmitting to the IRS? Connect with one of our experts at Sovos. We’ll be happy to answer your questions and provide you useful information about solutions available to ensure compliant and accurate, timely transmittals to the IRS.