IRS Enforcement Active — 2026 Filing Cycle

You got a letter.
Here's what to do next.

ACA penalty relief for Letters 226-J, 5699, and 972CG. You now have 90 days to respond.

ACA penalties can reach six figures. They can also be reduced or eliminated entirely if you respond correctly and on time. ACA 360 has done this before. Let us do it for you.

Upload Your IRS Letter → See Our Relief Process

The letters we handle. Every week.

Different notice, different penalty math. Same playbook: respond correctly, on time, with documentation that holds up.

Letter 226-J

The IRS is assessing penalties for failing to offer affordable, minimum-value coverage to your full-time employees. This is the one that can reach hundreds of thousands of dollars.

Letter 5699

The IRS is asking whether you qualify as an Applicable Large Employer. Don't respond, and they'll assume you do — and proceed straight to penalties.

Letter 972CG

Late or incorrect 1095/1094-C filings. Per-employee penalties stack quickly. We document Reasonable Cause and pursue First-Time Abatement.

What's at stake.

Penalty amounts are indexed to inflation annually. For 2025, they're higher than they've ever been — and the IRS now has a 90-day clock on your response.

Upload Your IRS Letter →

Penalty	2025 Rate
4980H(a) — no offer of coverage	$2,970 / FTE
4980H(b) — unaffordable or inadequate	$4,350 / subsidy
Late or incorrect 1095/1094-C	$560 / employee

Why these letters get sent.

Most of these errors are fixable. Most penalties are negotiable. But only if you act — and only if your response cites the right authorities and produces the right documents.

→ Safe harbor codes missing or wrong on Form 1095-C
→ Forms filed late or not distributed to employees
→ Variable-hour or rehired employees misclassified
→ Coverage didn't meet affordability or minimum value
→ Payroll or HR software produced inaccurate data

Common mistakes. Uncommon expertise required to fix them.

Our relief process.

Six steps from your first call to a closed file — and the systems that prevent the next letter.

We review your letter

We analyze the notice, identify the penalty basis, and tell you exactly where you stand.

We gather documentation

Offers of coverage, payroll records, measurement method documentation, and compliance history.

We build your case

We prepare your response using IRS-recognized relief criteria: Reasonable Cause or First-Time Abatement.

We submit to the IRS

A complete, professional response submitted well within the 90-day window.

We see it through

We track your case and handle any appeals until it's resolved.

We prevent the next one

After your case closes, we audit your compliance and set up monthly tracking that should've been there from day one.

Where we see penalty letters most often.

Some industries get hit harder. The complexity of the workforce drives the exposure.

Home Health Care

Per diem, multi-EIN, turnover that never sleeps.

We apply look-back measurement to variable-hour clinical staff, centralize eligibility tracking across all locations, and flag coverage obligations in real time.

The IRS doesn't adjust for your turnover rate. Your tracking system needs to.

Manufacturing & Warehousing

Shift work, union overlays, payroll blind spots.

We tailor measurement periods by shift, department, or job class — and consolidate data across HR, payroll, and scheduling platforms.

Unions don't override the ACA. Your non-union workforce still determines your exposure.

Quick Service Restaurants

Tips, seasons, franchises — all on the line.

We aggregate eligibility across all locations and ownership groups, apply safe-harbor strategies for tipped staff, and navigate seasonal employee rules.

Multiple FEINs may be treated as a single ALE group. Most franchise operators aren't tracking this correctly.

Retail

Constant rehires, schedule churn, silent risk.

We detect eligibility trends, apply proper break-in-service rules so rehires don't become retroactive liabilities, and integrate with your timekeeping system for live monitoring.

If you can't show the IRS a proper break-in-service calculation, you're exposed.

ACA 360 reconstructed our payroll and determined we were not actually an ALE. They submitted everything to the IRS. Months later, we received confirmation closing the 2021 tax year and releasing us from all ESRP penalties. Without ACA 360, we would have paid thousands and possibly closed a new location. ACA 360 saved our business.

Owner · Local Restaurant · Columbus, OH

Why employers work with us.

We know 226-J, 5699, and 972CG notices in detail. We know what the IRS is looking for and how to respond in a way that gives you the best shot at reducing or eliminating the penalty.

We've helped clients save tens of thousands of dollars — and in some cases, hundreds of thousands.

A real person, not a portal. Flat-fee pricing, no hourly billing surprises. And we don't stop at the response — after your case closes, we build the systems that protect you going forward.

What employers always ask.

What happens if I ignore the letter?

The IRS moves to collections, with interest. Your ability to appeal shrinks with every day past the deadline. Don't ignore it — call us. We respond within 48 hours.

I have a payroll provider. Shouldn't they have caught this?

Payroll providers report hours. They don't monitor ACA eligibility, apply look-back measurement, or review your 1095-C coding. That's the gap ACA 360 fills.

How much can a 226-J actually cost?

For ALEs, 226-J assessments often start in the tens of thousands and can reach hundreds of thousands depending on FTE count, the number of employees who got marketplace subsidies, and how many months are in scope. Most of that is reducible with the right response.

What does pricing look like?

Flat-fee for penalty response engagements — you know the cost before we start. Ongoing monthly compliance is priced under our CaaS packages.

You have 90 days.
Don't waste them.

A 15-minute conversation tells you exactly where you stand and what the next 90 days should look like. No pressure. No jargon. Just honest guidance from people who do this every day.

Upload Your IRS Letter → Call 614.532.2719

compliance@aca360.com · 614.532.2719 · PO Box 422, Grove City OH 43123