IRS provides guidance on various Letters 227

The IRS has provided guidance on the various Letters 227, which are acknowledgement letters sent to employers regarding the employer shared responsibility payment (ESRP). There are five different 227 letters.
ESRP. The ESRP rules apply only to applicable large employers (ALEs), which are generally employers that had an average of 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Penalties for the ESRP are set forth in Code Sec. 4980H.
Letters 227. The various Letters 227 are sent to close an ESRP inquiry or provide the next steps to the ALE. The IRS provided the following clarification about the five 227 letters:

  • Letter 227-J acknowledges receipt of the signed agreement Form 14764, ESRP Response, and that the ESRP will be assessed. After issuance of this letter, the case will be closed. No response is required.
  • Letter 227-K acknowledges receipt of the information provided and shows the ESRP has been reduced to zero. After issuance of this letter, the case will be closed. No response is required.
  • Letter 227-L acknowledges receipt of the information provided and shows the ESRP has been revised. The letter includes an updated Form 14765 (PTC Listing) and revised calculation table. The ALE can agree or request a meeting with the manager and/or appeals.
  • Letter 227-M acknowledges receipt of information provided and shows that the ESRP did not change. The letter provides an updated Form 14765 (PTC Listing) and revised calculation table. The ALE can agree or request a meeting with the manager and/or appeals.
  • Letter 227-N acknowledges the decision reached in Appeals and shows the ESRP based on the Appeals review. After issuance of this letter, the case will be closed. No response is required.

The IRS noted that the Letter 227 is not a bill. A CP229J bill will be sent after the ESRP has been assessed.

SOURCE: www.irs.gov

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