IRS Notice CP220J Explained

This article further explores the
following points:

  • IRS Notice CP220J Explained
  • How ACAwise provide the Solution

IRS Notice CP220J - An Overview

- Updated september 14, 2020 - 8.00 AM - Admin, ACAwise

Notice CP 220J is a final determination notice sent by the IRS to an employer who is liable for the potential penalty amount listed in the initial 226-J letter. So, if an employer receives the final notice from the IRS and continues to disagree with the assessed penalty amount; they can submit questions, request for the abatement process, or challenge the determination in federal court.

IRS Notice CP220J Explained

The IRS Notice CP220J is the most serious of any request that mandated ACA reporters may receive from the IRS. This is not simply a request for additional information or a penalty notification, this is a demand for your Employer Shared Responsibility payment.

This is an official notice to pay a penalty that the IRS has levied against an employer. Negotiations are off the table at this point in the process. This penalty is final and any employers that disagree will have to file a lawsuit to be carried out in federal court.

The Notice CP220J contains the following important information:

  • Amount Due
  • Deadline to make a payment
  • Payment options

Please note that when employers fail to make the Employer Shared Responsibility Payment by the deadline provided by the IRS in Notice CP220J, interest will begin to accrue until the full amount of the penalty is paid.

The IRS will not reassess the amount of your penalty payment, but you are able to make a payment arrangement. Employers who apply for a payment plan with the IRS will be able to make installment payments as opposed to paying off the lump sum. This can make penalty payments more manageable, however, there are additional costs associated with this process.

To learn more about IRS payment plans, visit: https://www.irs.gov/payments/payment-plans-installment-agreements#plandef

The only good news about the Notice CP220J is that it won’t come as a surprise. Before the final penalty, employers will receive Letter 226J. Employers must take this notice seriously and most importantly, respond within the time frame that the IRS provides. The IRS generally gives employers 30 days to respond to
Letter 226J.

This response is crucial. Employers who act in good faith and respond in a timely manner may have their penalties eliminated or at least reduced by the IRS. The IRS will then send employers a Letter 227 notifying employers of their decision regarding the penalty.

Employers who fail to respond to the Letter 226J will receive the Notice CP220J. The sooner employers respond to the Notice CP220J, the better. Ignoring this demand for payment will just allow unwanted interest to accrue.

The ACAwise Solution

Once your business gets hit with one penalty for failing to meet the employer-shared responsibility provision, you will want to ensure that this never happens again! ACAwise provides a wide array of services that will help you maintain your ACA reporting moving forward.

Our services are flexible and comprehensive. Whether you are an experienced filer in search of a secure e-file solution, or a novice looking for a team of experts to generate your Form 1095 codes. We can even offer you monthly compliance tracking options.

If you have received a Letter 226J or an earlier notification that you have failed to comply with the ACA reporting requirements, we implore you to reach out to our team. We can help you correct erroneous reporting and if you have failed to comply with the IRS in the past, we offer prior year filing.

As your comprehensive, full-service ACA reporting provider, we can work with you to create a plan for maintaining your IRS compliance before you get to the point of receiving a Notice CP220J from the IRS.

Access our resource center for more information about tax relief due to COVID-19. Visit Now