Penalties for Errors on 1094-C or 1095-Cs??

[kmhaab]

I know the ACA "good faith" reporting relief ended in 2020, but I'm wondering if anyone knows it the IRS is actually assessing penalties for errors on a 1094-C or 1095-C filed after the relief ended? 

[Brian Gilmore]

I've seen significant penalties for failure to file via IRS Letter 5699. 

I have not seen incorrect/late ACA reporting penalties via Notice 972CG.  They might be happening, I just haven't seen them yet in the wild.

2026 Newfront ACA Employer Mandate & ACA Reporting Guide

[kmhaab]

On 2/17/2026 at 4:26 PM, Brian Gilmore said:

I've seen significant penalties for failure to file via IRS Letter 5699. 

I have not seen incorrect/late ACA reporting penalties via Notice 972CG.  They might be happening, I just haven't seen them yet in the wild.

 

Thank you Brian, that's helpful! I have another question for you, if you don't mind - if the ESRP is being triggered by reporting errors, do you see ALEs including supporting documentation in their response? Or is describing the corrections needed in the ALE's response enough? 

And if the error was the MEC offer indicator in Part III, column a of the 1094-C (i.e., incorrectly checked "no" to offering MEC to 95% of full-time employees), and supporting documentation is required, what type of supporting documentation is sufficient?

[Brian Gilmore]

I've seen some combination of a letter explaining where the error(s) occurred on the forms and how it was caused by a third-party reporting service, corrections to the 1095-C coding on the Form 14765 that's included with the 14764/Letter 226J, and a corrected version of the 1094-C that was originally filed (e.g., correcting column (a) in Part III to say "Yes" to the MEC offer for all 12 months).  In situations where the §4980H assessment was actually based on a simple reporting error, I've almost always seen a) the IRS agree to remove the penalty assessment without too much back and forth, and b) no penalties assessed for the coding errors.