No Statute of Limitations for IRS Assessment of ESRP (ACA)

Have you ever asked yourself: “Do I have to complete my ACA filings for previous tax years?” The answer is YES. There is no statute of limitations in assessing Employer Shared Responsibility Payment (ESRP).

No Statute of Limitations

The IRS published a Memo on February 24, 2020 regarding assessments of an ESRP under Section 4980H stating that there are no statute of limitations here. The Memo makes it quite clear that there is none in regards to assessment of ESRP.

The Office of Chief Counsel stated that it is not possible for the IRS to determine the ESRP solely using Forms 1094-C and 1095-C. Subsequently, the filing of these returns does not fall under the statue of limitations under Section 6501 (a).

Employer Shared Responsibility

According to the IRS, “anything that an ALE is liable to pay under section 4980H is called the Employer Shared Responsibility Payment (“ESRP”).” The IRS determines the ESRP by collecting information from the ALEs and their FTEs.

If you are an ALE and do not offer affordable health coverage to at least 95% of your full-time employees, you may be subject to one of two employer shared responsibility payments.

An ALE member will owe the first type of payment if:

  • ALE member failed to offer Minimum Essential Coverage (MEC) to at least 95% of its full-time employees (FTEs) and their dependents.
  • AND if at least one FTE receives a premium tax credit for purchasing coverage through the Marketplace.

If an ALE member fails to offer MEC that is affordable to their FTEs, the ALE member may be subject to the second type of ESRP.

An ALE member could owe the second type of payment if:

  • The MEC the employer offers to the employee is not affordable.
  • The MEC the employer offers does not provide minimum value.
  • OR, The employee is not one of the ‘at least 95% of employees’ that is offered MEC.

Part-time and full-time equivalent employees do not factor in to the calculation of ESRPs.


In summary, there is no statute of limitations on the assessment of Employer Shared Responsibility Payments, so employers should ensure that they have filed for all years in which they were required.

Please find additional information on related topics below:
What is Employer Shared Responsibility?
What is IRS Letter 226-J?

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.

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