IRS 6055 & 6056: The Penalties


This is the second part in our reporting series leading up to our free webinar on 6055 & 6056 reporting on Tuesday, June 2 at 10:00a.m.  You can register for our webinar here.

The Affordable Care Act created new reporting requirement under IRS Code Sections 6055 and 6056.  AUI is working on bringing some of the details to you in a blog series.  If you have questions about the basics surrounding 6055 and 6056 you can refer to our last post here.

Today we are going to cover the penalties that come as a result of not complying with Sections 6055 and 6056.  A reporting entity (an employer, insurance carrier, or third party entity handling reporting for an organization) that fails to comply with Section 6055 or 6056 reporting requirements may be subject to general reporting penalties for:

  • Failure to file correct information returns
  • Failure to furnish correct payee statements

The penalty is for these failures is $100 for each return, up to $1,500,000 per calendar year.  However, penalties may be waived if the failure is due to a reasonable cause.

In addition, if the reporting entity corrects the failure within 30 days after the required filing date, the penalty will be reduced to $30 for each return.  If the reporting entity corrects the failure after 30 days but before August 1 of that year, the penalty will be reduced to $60 for each return.

Failures due to the intentional disregard of the filing requirement or the correct information reporting requirement will have no penalty reduction, and the penalty will be equal to $250 or ten percent of the aggregate amount of the items required to report correctly, whichever is greater.

Fortunately, there is some short term relief from penalties.  The IRS is giving employers time to develop appropriate procedures for data collection and compliance with these new requirements.  For returns and statements filed and furnished in 2016 to report offers of coverage in 2015, the IRS will not impose penalties on reporting entities that can show they make good faith efforts to comply with the information reporting requirements.  This includes incorrect or incomplete information reported on the return statement including social security numbers, TINs or dates of birth.  Of course this is only for employers who file returns in a timely manner and make a good faith effort to comply with these regulations.

If you have more questions about how 6055 and 6056 reporting may impact your company please reach out to us.  We will continue to highlight key components about this reporting in our blog.  AUI works with its clients to keep them up to date on healthcare laws.


Disclaimer: The intent of this analysis is to provide general information regarding the provisions of current healthcare reform legislation and regulation.  It does not necessarily fully address all your organization’s specific issues.  It should not be construed as, nor is it intended to provide, legal advice.  Your organization’s general counsel or an attorney who specializes in this practice area should address questions regarding specific issues.

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