What is IRS Letter 5699?
378 views | Last modified 1/11/2021 12:22:06 PM EST | Added by ACAwise Team

Under regulations implementing section 6056, Applicable Large Employers must file information returns with the IRS about whether they offered health coverage to their full-time employees. 

In such a case, when an IRS identifies an employer as a potential non-filer of the required ACA Information Returns (Form 1094-C and 1095-C) on time for the specific tax year, it will send a letter 5699 to them.
 
Information in IRS letter 5699
 
The Letter will have the following five questions for the employer.
 

• Are you an ALE for the calendar year and already filed Form 1094-C and Form 1095-C with the IRS under a different EIN? (if yes, provide the name, EIN, and date the returns were filed)
• Are you an ALE for the calendar year and planning to include your Form 1094-C and 1095-C with this Letter? (Explain reasons for late filing below under "Other")
• If you are yet to file and need more than 90 days from this letter date to provide the other required details? If yes, explain the reason under the option "Other."
• Are you not an ALE for the calendar year? If yes, explain the reason under the option "Other."
• Others, use this option to provide the information if you have any other reason for not filing.

Once received this Letter, the employer must respond with proper information to one of the options which apply to them within 30 days to avoid large penalties from the IRS.
 
Response Received to Letter 5699
 
Based on the response received, the IRS will determine whether or not the information supports the response.
 

• Information provided supports the response-the case will be closed with no further action, and Letter 5840, IRC Section 6056 - Information Return Closing Letter will be issued to the employer.
• If the information provided does not support the response, the employer receives Letter 5005-A with the proposed penalty, Information Return Penalty Notice (Form 1094-C or 1095-C) under IRC 6721 with a completed Form 886-A enclosure. 
• This letter 5005-A provides information to the ALE about the penalties and next steps depending on whether they disagree or agree with the proposed penalties.

If you have received an IRS Letter 5699 and need assistance to move forward, no worries, contact ACAwise at (704)-954-8420 or email your concern with the Letter you received to [email protected]. We are happy to assist you in responding to the IRS letter within 30 days from the date you received it.