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Be on Guard: IRS Warns of New Scam Related to the ACA

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Be on Guard: IRS Warns of New Scam Related to the ACA

The Internal Revenue Service (IRS) says that it has received many complaints, nationwide, of scammers sending fake CP2000 notices for tax year 2015. Criminals are sending taxpayers an email with an attached CP2000 notice, demanding payment for unpaid taxes related to the Affordable Care Act (ACA). The IRS has often stated that it does not contact taxpayers via email, so the biggest red flag of this scheme is the email itself.

Here are other warning signs the message you’re receiving may be fraudulent, in addition to tips on what to do if you’re contacted by a scammer.

The fake email notice:

  • states that the taxpayer underreported income related to his or her ACA coverage in 2014, and now owes money to the IRS
  • tells taxpayers to make their check payable to the “I.R.S.”
  • directs taxpayers to mail their checks to an address in Austin, Texas
  • includes a payment voucher that lists the letter number as 105C
  • contains a payment link within the actual email

 

How to tell whether a CP2000 notice is real

An IRS-issued CP2000 notice:

  • is sent by mail, not by email or social media
  • includes detailed instructions about what to do if you agree or disagree that you owe additional tax
  • requests that you make your check payable to the “United States Treasury” if you agree that you owe additional tax
  • tells you what to do if you are unable to pay the amount due, such as setting up installment payments

 

A CP2000 notice informs you that the information the IRS received from a third party – such as your employer or bank – does not match what’s reported on your tax return. The notice contains the IRS’ proposed adjustments to your income, payments, credits or deductions – which may lead to you owing additional tax or getting a refund.

If you’re unsure whether a mailed CP2000 notice is real, call the IRS directly to find out.

The IRS says it will not:

  • contact taxpayers by email, phone, text or social media to request personal or financial information
  • demand immediate payment by phone, or take enforcement action right after a phone conversation. The agency usually sends prior notification by mail before taking enforcement action
  • call or email you requesting that you verify your identity
  • require that you pay your tax bill using a specific payment method, such as prepaid debit card
  • ask for credit or debit card information over the phone or by email

 

What to do if you receive a bogus CP2000 notice by email:

  • Do not reply to the email.
  • Do not click on any attachments. The link may contain a virus designed to harm your computer.
  • Forward the email to phishing@irs.gov.
  • Delete the email.

 

In February 2016, the IRS reported a 400 percent surge in phishing emails and malware scams. The agency and its Security Summit partners – which include state taxation agencies – are raising awareness on the issue so that taxpayers and tax professionals can better safeguard themselves against tax-related scams. For more information on how you can protect yourself, visit the IRS website.

 

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.


Heidi Lively

by Heidi Lively


Author Bio: Heidi Lively is the former Paycom Additional Business Manager, where she focused on the compliance and service of additional business products. Previously, she served customers in the Paycom Service Department where she quickly rose through the ranks to earn a team leader position. Having performed in a leadership position for a number of years, Heidi was able to cultivate and influence others through Paycom’s leadership initiatives.

ACA ‘Cadillac Tax’ Delayed to 2022

ACA ‘Cadillac Tax’ Delayed to 2022

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The short-term spending bill that ended the government shutdown on Jan. 22 included a small provision that again delayed the Affordable Care Act’s (ACA) “Cadillac tax,” now to 2022.

So nicknamed because it targets employer-sponsored health plans with the most generous level of benefits, the Cadillac tax originally was to take effect in 2018. In 2015, the effective date was pushed to 2020, and now the new bill pushes the effective date two additional years into the future.

When – or if – the Cadillac tax goes into effect, it will impose a 40% excise on the cost of employer-sponsored health coverage exceeding a certain dollar value per employee. The dollar value would have been $10,200 for individual coverage and $27,500 for family coverage in 2018, had the tax not been delayed. The law calls for the amount to be adjusted annually with growth in the consumer price index.

How does this affect Employers?

Employers do not have to contend with the tax for an additional two years. The IRS has not yet issued regulations addressing implementation; with this additional delay, the agency likely will not do so in the near future.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Deadline Extended

Employer Deadline Extended for Furnishing 2017 ACA Forms

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Distribution of 2017 Affordable Care Act (ACA) Forms 1095-B or -C to your employees has been extended.

As issued in Notice 2018-06, the IRS has extended the deadline from Jan. 31 to March 2. (However, the deadline to provide Forms W-2 and 1099 to employees and contract workers remains as Jan. 31.)

Filing deadlines unchanged

While the deadline to furnish forms was extended, the filing deadlines remain the same: Feb. 28 for paper forms, and April 2 for electronic forms.

IRS Notice 2018-06 emphasizes that employers who do not comply with the due dates for furnishing or filing are subject to penalties under sections 6722 or 6721.

Good-faith transition relief extended

The IRS also announced the extension of good-faith transition relief. This may allow an employer to avoid some penalties if it can show that it made good-faith efforts to comply with the information reporting requirements for 2017.

This relief applies only to incorrect and incomplete information reported on the ACA forms, and not to a failure to file or furnish the forms in a timely manner. Additionally, the IRS stated it does not anticipate extending either the good-faith transition relief or the furnishing deadline in future years.

Contact a trusted tax professional if you have questions on how this may affect your business specifically.

Click here to read more about how the ACA is affect by the new Tax Cuts and Jobs Act.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Tags: , , , ,
Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Employers Unaffected by ACA Changes in New Tax Law

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On December 22, President Trump signed the Tax Cuts and Jobs Act. The bill includes a provision that reduces the penalty for not complying with the Affordable Care Act’s (ACA) individual mandate to $0, effectively removing the penalty for individuals who do not have health insurance coverage after the effective date of Jan. 1, 2019.

However, this update will not impact employers, since the law does not remove the employer mandate (the requirement that large employers offer health insurance coverage to their full-time employees or pay a penalty) or the associated employer reporting requirements. Large employers subject to the mandate still face penalties if they fail to comply with either, and the IRS has begun sending out notices with preliminary assessments of the employer shared responsibility penalty for tax year 2015.

Employers subject to the employer mandate should continue to comply and be prepared to file Forms 1094 and 1095 with the IRS in accordance with the normal deadlines.

For the 2017 tax year, the deadlines to provide Forms 1095-C to employees is Jan. 31, 2018.  The deadline to file Forms 1094-C and 1095-C with the IRS is Feb. 28, 2018 if filing paper forms, and April 2, 2018, if filing electronically.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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