Last week we reported on the IRS employer reporting delay announced at the end of December in Notice 2016-4. This week the IRS sent out a newsletter with a reminder of the employer reporting delay, but also announcing a moratorium on the health insurance provider fee for 2017. The 2016 fee will still be due. Section 9010 of the ACA imposes a fee on each covered entity engaged in the business of providing health insurance. The IRS newsletter states that health insurance issuers are not required to pay these fees for 2017, but again the moratorium does not affect the filing requirement and payment of the fees for 2016. The newsletter also provides a reminder that electronic filing of Form 8963 is encouraged, and that additional information can always be found on the health insurance providers page.
In other IRS announcements, there was an increase in the 6055 and 6056 penalties (chart here). However, there is relief provided from both 6055 and 6056 penalties for incomplete or incorrect returns filed or statements furnished to covered individuals in 2016 for coverage provided in calendar year 2015. When implementing new information reporting requirements, short-term relief from reporting penalties is frequently provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with the new reporting requirements. No relief is provided for employers that cannot show a good-faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. However, consistent with existing information reporting rules, reporting entities that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause are satisfied.