1. Top employee record reporting error when filing in AIR.

From year one of filing to now, the top error being returned by the IRS is that the employee or covered individual’s social security number (SSN) and name

 do not match the IRS database. This can be frustrating for many employers as their data is reflective of the name that employees provide for payroll and/or benefits. Something as simple as a period behind an initial can make the difference between a matching and a non-matching record on the IRS side. An employee that gets married late in the year is likely to trigger this error due to the database not being up to date in real time.

Luckily, the IRS has always allowed for this to remain as an acceptable error provided the employer has done their due diligence in making sure that the social security number provided does belong to the employee in question.

2.  Employer provided data not matching the IRS database.

All employers have a Federal Employer Identification Number (FEIN) issued by the Department of Treasury. The company name attached to this number must match EXACTLY what is in the IRS database. Many times, employers receive an error that the “Business Name” and “Employer EIN” names do not match the IRS database.  

This can become very cumbersome for the employer to figure out why it is not matching. The IRS provides a CP 575 letter after applying for a FEIN. Most companies that are reporting have been in existence for some time and likely will have difficulty putting their hands on this letter. Employers can

contact the IRS and request an EIN verification letter by calling 1-800-829-4933.

3.  Knowing what the error codes mean and how to correct them.

The error messages returned via the IRS AIR program can be difficult to decipher. For example, the error: “If Form 1095C checkbox ' CoveredIndividualInd' is checked, then at least one instance of 'CoveredIndividualGrp' must have a value.” This simply means that Part III of the 1095-C form was checked off but

 there is no data in that section.

Having a supportive ACA compliance solution can help with resolving errors from the IRS. As it stands, decoding what needs to be corrected and resubmitted can be a daunting task.

4. IRS AIR system interruptions.

Unexpected service interruptions in the filing system happen with little to no notice year over year. The IRS has yet to have a single reporting year where the system did not get overwhelmed and must be taken offline for unscheduled maintenance. This causes interruption in status checks from submissions already made and the ability to send new submissions. This causes extreme frustration for both software providers and large employers as filing deadlines must be met or penalties will be levied.

5. Lag time between processing and penalty letters.

The biggest issue is not with the IRS filing system but instead with the IRS penalty process. For years, penalty letters have come out several years in arrears. For example, the IRS has just started sending out penalty letters for the 2020 reporting year just as the start of the 2022 reporting year is getting underway. Capturing the needed past year data to respond to a letter can be a difficult task for any employer. Good record keeping and data storage are a must as there are no statutes of limitations on ACA IRS penalties.

 

The ACA reporting process has come a long way over the past seven years but there are still issues to resolve. Employers need a source to rely on to help overcome these obstacles. Ensuring that you select a compliance partner that is responsive, reliable, and has subject matter expertise is of huge importance. The ever changing world of regulations doesn’t have to be daunting provided you have the resources you need to get the job done.

SyncStream has been filing since the first year of ACA reporting in 2015. Our staff are tenured, highly trained ACA subject matter experts. We remove the complexity of ACA compliance, offering the expertise, tools, and knowledge that guide businesses toward higher compliance, lower financial risk, and streamlined ACA reporting. SyncStream will give you the peace of mind that your compliance is in good hands. Contact us today.