The Trade Preferences Extension Act of 2015 increases penalties for the failure to file correct information returns or to provide individual statements under Internal Revenue Code Section 6055 or Section 6056. Signed into law by President Barack Obama on June 29, 2015, these changes are effective for information returns and individual statements required to be filed or provided after Dec. 31, 2015.
To allow additional time for developing appropriate procedures for data collection and compliance with these new reporting requirements, short-term relief from penalties is available. For returns and statements filed and furnished in 2016 to report offers of coverage in 2015, the IRS will not impose penalties on reporting entities that can show they make good faith efforts to comply with the information reporting requirements. This relief is provided only for incorrect or incomplete information reported on the return or statement, including Social Security numbers, taxpayer identification numbers or birthdates. No relief is provided for reporting entities that do not make a good faith effort to comply with these reporting regulations, or fail to file an information return or provide an individual statement on time.
Reporting under Section 6055 and Section 6056 is done on a calendar-year basis, regardless of whether the employer has a noncalendar-year plan. This means that employers will need to collect and record information in 2015 in order to prepare for the filing deadlines in 2016. Employers should begin tracking this information now to avoid penalties for failure to comply with these reporting requirements.
For more in-depth information, read Hylant’s full Healthcare Reform Legislative Brief.