Recently, as part of routine follow-ups regarding the completeness of tax returns, the IRS began contacting some taxpayers with notices related to the Affordable Care Act (ACA) tax compliance and forms. The IRS has also reached out to some taxpayers to inform them about available exemptions from a penalty for not having health insurance in 2014.

While many of these letters and notices can be easily dealt with, some of your clients might be reaching out to you for assistance. To help you get up to speed on the alphabet soup of these IRS letters, we’ve created a cheat sheet to help you make sense of what each of these forms means and whether an action is required.

IRS Notice

What it Means

Required action

Premium Tax Credit
CP06/CP06A The IRS is auditing your client’s tax return and needs documentation from them to verify the Premium Tax Credit (PTC) that they claimed. The IRS will be holding all or part of their refund, pending the result of this audit, because of this discrepancy with their PTC. Read the notice and the enclosed Form 14950, Premium Tax Credit Verification.Complete the response form and return it along with the documentation the IRS requests to verify the items that they are auditing. 
CP75 The IRS is auditing your client’s tax return and needs documentation to verify the Earned Income Credit (EIC) that they claimed. The EIC and/or the Additional Child Tax Credit (ACTC) portions of their refund are being held, pending the results of this audit. If the taxpayer claimed the Premium Tax Credit (PTC), that portion of their refund is also being held. Complete the response form and return it along with the documentation the IRS requests to verify the items that they are auditing. Read the notice and the enclosed Form 14950, Premium Tax Credit Verification, if applicable.
Advanced Premium Tax Credit
Letter 5591 The IRS sends this letter to Advanced Premium Tax Credit recipients with no indication of a return-filing (non-filers) letter. Please urge your client to file their 2014 federal tax return with Form 8962 as soon as possible, even if they don’t normally have to file. This will protect their eligibility for assistance with paying for Marketplace health insurance coverage in 2016. Advise your client to file their 2014 tax return with Form 8962 as soon as possible.
Credit for Small Employer Health Premiums
CP156 The IRS received your client’s Form 990-T, Exempt Organization Business Income Tax Return and Form 8941, Credit for Small Employer Health Premiums. The refundable portion of the credit was reduced by 8.7%, as a result of the Balanced Budget and Emergency Deficit Control Act of 1985. No action is required.
Shared Responsibility Payment/ Penalty for Non-insurance
CP15H The IRS is notifying your client that their shared responsibility payment (SRP) assessment is due to a recalculation, based on changes to their income tax liability. Read the notice carefully – it explains due date, amount due and payment options, and advises your client to make payment by their due date.
CP21H The IRS made the changes your client requested to their tax return for the tax year on the notice, which also changed their shared responsibility payment. Read notice carefully –  it will explain the changes to your client’s shared responsibility payment. If they owe, advise them to pay the amount due by the date on the notice’s payment coupon. Contact the IRS if your client disagrees with the changes.
CP22H The IRS made the changes your client requested to their tax return for the tax year on the notice, which also changed their shared responsibility payment. Read the notice carefully –  it will explain the changes to your client’s shared responsibility payment. If they owe, advise them to pay the amount due by the date on the notice’s payment coupon. Contact the IRS if your client disagrees with the changes.
CP14HCP501HCP503H The IRS sends these notices because your client owes money on an unpaid shared responsibility payment. If your client owes, advise them to pay the amount due by the date on the notice’s payment coupon. Contact the IRS if your client disagrees with the fee.
Branded Prescription Drug Fee
CP267A The IRS informs your client they’ve overpaid the Branded Prescription Drug Fee. Call the IRS within 30 days of the notice date between 8:00 a.m. and 4:30 p.m. ET, at the number on the notice, and identify payments by tax form, fee year and amount.
Insurance Provider Fee
CP267B The IRS informs your client that they overpaid the Insurance Provider Fee under Section 9010 of ACA. Call the IRS within 30 days of the notice date between 8:00 a.m. and 4:30 p.m. ET, at the number on the notice, and identify payments by tax form, fee year and amount.

These IRS notices follow the routine follow-up process, and each notice has specific instructions about what you and your clients need to do. Being informed about these letters will help you provide timely council to your clients and reduce unnecessary stress.

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