When the IRS sends a letter, we answer it.
226-J, 5005-A, 5699 — full letter response, penalty abatement, and pre-filing exposure analysis. Reactive when the letter has arrived. Proactive before the next one.
Two postures. Both required.
Penalty defense is two jobs. One is responding to letters that already came — within the deadline, with the documentation the IRS actually evaluates, against the calculation methodology they actually use. The other is making sure next year’s filing doesn’t produce another one. We do both, and our team responds to ACA penalty correspondence regardless of who originally filed the return.
226-J Penalty Response
Full letter response within the 90-day deadline. We respond to penalty correspondence on returns we filed, and on returns we didn’t.
A 226-J is the IRS’s preliminary penalty assessment, and the response is more than a letter. It’s a documentation packet: a forensic look at Form 14765 (the list of employees the IRS flagged), cross-referenced against historical payroll and benefits data, with a mathematically defensible response that addresses every flagged employee. Most 226-J assessments are inflated by coding errors and false-positive triggers, and most can be substantially reduced with the right response. The work is documented, the work is filed, and the follow-up correspondence — Letter 1948C, Letter 3064C, CP215 — is handled by the same team.
Included:
- →Full letter response within deadline
- →Form 14765 forensic analysis
- →Historical payroll/benefits cross-reference
- →Defensible response packet
- →Appeals coordination
- →Follow-up correspondence on related letters
For any ALE that received a 226-J, regardless of who filed the original return.
Penalty Exposure Assessment
Know what the IRS will see before they see it.
The IRS has your historical data and runs the same compliance math we do. A Penalty Exposure Assessment runs that math first — on your data, in detail, before any filing — and surfaces the 4980H(a) and 4980H(b) exposure you’re carrying. The output is a per-employee, per-month exposure map: where the risk is, what triggered it, what the assessed penalty would be. It’s the report that tells you what to fix while you still have time to fix it.
Included:
- →4980H(a) and 4980H(b) exposure calculation
- →Per-employee/per-month detail
- →Coding integrity check
- →Prioritized remediation list
For any ALE that wants to know its real exposure before the IRS calculates it for them.
Every ACA penalty letter the IRS issues.
Whether you’ve received a preliminary inquiry or a final demand for payment, our team responds.
- Letter 226-J
- Preliminary employer shared responsibility payment assessment.
- Letter 5005-A
- Penalty for failing to file or distribute 1094-C / 1095-C forms.
- Letter 5699
- Pre-penalty inquiry. The IRS asks why you didn't file.
- Letter 972CG
- Late filing penalty under IRC Section 6721.
- Letter CP215
- Civil penalty assessment after the IRS reviews a prior response.
- Letter CP504B
- Notice of intent to levy. The penalty has been finalized and the IRS is preparing collection.
If you received any of these, the response window is short. We should talk today.
You might also need:
ACA Filing →
Once the current letter is resolved, the next filing season is the next risk window.
ACA Advisory →
Many 226-J letters trace back to a controlled group misclassification or a measurement period error.
Fully Managed ACA Compliance →
If defense revealed deeper structural issues, the bundled engagement addresses them year-round.