Does an employer that receives a Letter 226J have an opportunity to respond?

An Applicable Large Ermployer (ALE) will have an opportunity to respond to Letter 226J before any penalty is assessed and notice and demand for payment is made. Letter 226J contains instructions for how the ALE should respond in writing, either agreeing with the proposed employer shared responsibility payment or disagreeing with part (or all) of the proposed amount.

After the initial ALE response, the IRS’ next steps are as follows:

• The IRS will acknowledge the ALE’s response to Letter 226J with an appropriate version of Letter 227 (a series of five different letters that, in general, acknowledge the ALE’s response to Letter 226J and describe further actions the ALE may need to take).
• If, after receipt of Letter 227, the ALE disagrees with the proposed or revised employer shared responsibility payment, the ALE may request a pre-assessment conference with the IRS Office of Appeals. The ALE should follow the instructions provided in Letter 227 and Publication 5, Your Appeal Rights and How To Prepare a Protest if You Don’t Agree for requesting a conference. A conference should be requested in writing by the response date shown on Letter 227 (generally will be 30 days from the date of Letter 227).

This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice.  Selerix encourages readers to consult with appropriate legal and/or tax advisers.