Following is an excerpt:
The IRS Office of Chief Counsel recently issued a memo which, in a surprise to many, concluded that the filing of the Affordable Care Act (“ACA”) Forms 1094-C and 1095-C (“C Forms”) does not start the statute of limitations on the Employer Shared Responsibility Payments (“ESRP”) under Internal Revenue Code (“Code”) § 4980H and, in fact, that there is no statute of limitations with respect to ESRP assessments.
In short, the ESRP is a penalty that may be assessed against “applicable large employers” (“ALEs”) when, in certain circumstances, a full-time employee obtains a premium tax credit for health coverage purchased on an Exchange. Employers file C Forms annually to report information about their offers of health care coverage to employees so that the IRS can assess potential ESRP liability under Code § 4980H. Until the memo’s issuance, the consensus opinion was that the filing of the C Forms started the Code’s general 3-year statute of limitations that runs from the date a “return” is filed or the return’s due date, whichever is later. The instructions on the C Forms, in fact, refer to the C Forms as “returns” and advise filers to keep copies of information returns and supporting documents for at least three years from the returns’ due date. …