Restaurants and hospitality companies are increasingly at risk to receive a misguided tax penalty notice due to Affordable Care Act compliance issues, despite offering health insurance to full-time employees. If you received a letter entitled 226-J from the IRS do not to ignore it or you might lose your opportunity to challenge an erroneous penalty assessment. 

Recipients have 30 days to respond, but they may contact the IRS and request an extension. The 226-J letter is the IRS’s official notice to an employer of a proposed Employer Shared Responsibility Payment (“ESRP”) assessment. It’s for allegedly failing to comply with the ACA employer mandate – essentially a penalty for a large employer’s failure to offer eligible full-time employees an affordable health plan.

Click here to access the Restaurant Law Center’s general guidance on what you should do if you receive a letter.