New IRS Notice Offers Relief from Obama Care

The IRS has just issued Notice 2011-28. The IRS’s notice offers interim guidance about employer-provided health insurance coverage data, which under Obama Care must now be reported on an employee’s W-2. Tax lawyers reviewing the notice say it provides a new break for smaller businesses and clarification regarding retiree health benefit reporting.

So what’s going really going on here? The answer, according to tax attorneys is the IRS is giving a break to smaller businesses. Whether your small business qualifies for additional time to meet the Obama Care requirements is based upon the total number of W-2s your company ends-up filing for 2011. Businesses with less than two hundred and fifty (250) W-2s filed in 2011 will not be required to include health care coverage information on employees’ W-2s filed for 2012. Under the new interim IRS guidance, businesses falling within this category are clear until January of 2014.

Another area of clarification involved whether companies, which continue to provide health insurance to their retirees, will have to issue W-2s for their retirees. Again, tax lawyers reviewing the IRS’ notice say if all the company is providing is health insurance to the retiree then no W-2 need be issued.

Businesses wrestling with tax compliance challenges, sometimes promulgated by ill-conceived legislation, no matter how well-intentioned, need help. If the company doesn’t have the internal resources to assist in managing compliance issues that chore is frequently delegated to the businesses’ outside CPAs, accountants or even bookkeepers. But many times these professionals are being asked to manage very complicated regulatory compliance issues well beyond their areas of expertise. It is in those instances when consulting a competent tax lawyer makes the most sense.

Some businesses wait too long to get help, and end-up with years of unfiled returns and/or owing back taxes. Others don’t comply with IRS reporting requirements and become subject to all kinds of fines and penalties. Companies finding themselves in trouble with the IRS must be proactive in managing the problems and seek out competent help, either with a licensed tax lawyer or other tax professional. The faster you act, the more money you may save.

 

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