The IRS sends out Letter 1865C to employers if they cannot process some of their ACA forms. This can be for a variety of reasons, including improper format, incorrect forms, and typos among other things.
What is IRS Letter 1865C?
The IRS Letter 1865C is a notice typically sent out to employers and filers that have submitted paper ACA filings. This notice will inform the filer of the issue, but it is characteristically pretty vague.
Some reasons that you could receive a Letter 1865C include:
- A typo in the company name or EIN
- Improper formatting, such as:
- The font size is too small.
- The form is printed in portrait format instead of landscape.
- The data is not in each box correctly.
- Misprinted data
How do I respond to an IRS Letter 1865C?
Your response to the notice depends on how you filed:
- If you used a vendor to complete your ACA reporting, then you should reach out to the vendor and see if they can identify and correct the issue.
- If you submitted the filing on your own, then you should review your copy, identify, and correct the issue.
- If you need more time, then you can consider contacting the IRS and requesting an extension.
No matter the case, this notice does require a response, or you will likely incur fines and penalties.
Important note: The IRS Letter 1865C does have a contact phone number, but this leads to a recording. You may have more luck by calling the IRS line for employers, or contacting your local IRS office.
How do I avoid an IRS Letter 1865C?
It’s very possible to avoid getting an IRS Letter 1865C altogether. To do this, you can:
- The simplest way is to submit an electronic filing instead of a paper filing.
- Electronic filings are in a completely different format and don’t rely on physical forms. Vendors must become authorized e-file providers by undergoing testing, so formatting errors are less likely.
- If you choose to submit a paper filing using a vendor, double check the forms before they are mailed out.
- Ultimately, it is up to the employer to ensure that the correct data is present and that the information returns are formatted correctly.
- Review the forms after they have been submitted. If you see any issues, then you may be able to submit corrections before a letter is sent out.
If you receive an IRS Letter 1865C, don’t panic! In most cases, the issue can be resolved quickly and easily. To avoid receiving this notice, be sure to check and double check your record before you paper file, or to simplify things further, you could submit an electronic filing instead.
Keeping up with your compliance efforts will help you avoid filing penalties for ACA forms. This is incredibly important now more than ever, as fine amounts and tax enforcement are increasing.
If you’d like to learn more about Form 1095-C, check out our Understanding Form 1095-C article or downloadable PDF below:
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.