More than a decade has passed since Congress enacted the Affordable Care Act (the ACA). The ACA has expanded health insurance to (and has mandated the minimum coverage benefitting) millions of employees. That legislation not only modified America’s healthcare laws, but also amended our nation’s tax code. In turn, those amendments have led Washington to issue regulations, rulings and guidance that –– with the tax code’s new provisions –– create additional tax liabilities (collectively, the ACA Law).
The ACA Law applies to most enterprises that employ a sizable staff. Simply put, a substantial assessment would target any sufficiently large employer that fails to cover (or to sufficiently cover) one or more non-exempt employees.
Many months ago, a particular employer (the Client) found itself in the cross-hairs of the ACA Law. The IRS concluded that the Client had broken the law, by failing to provide health insurance to two of its employees. Among other consequences, that adverse ruling resulted in a supplemental assessment of nearly $160,000 against the Client.
Before seeking out Lipson Neilson, the Client had hired its accountants to contest the ruling and the assessment. Due in part to the still-evolving nature of the regulatory regime, the accountants’ rebuttal to (and their related filings with) the IRS failed to fully analyze the application of the ACA Law to the Client’s circumstances. And so, the IRS rejected that rebuttal, while affirming the entirety of the original assessment.
The Client’s prospects improved, though, once it engaged Lipson Neilson. A team at Lipson Neilson led by Stuart Logan prepared a formal-and-comprehensive petition to the IRS, reviewing and applying relevant provisions of the ACA Law. In tandem, our firm compiled and presented the evidence needed to corroborate the factual underpinnings of the Client’s defense. Within weeks of the petition’s delivery, the IRS reversed its prior ruling and retracted its interim affirmation. And so, without further discussion, the IRS reduced the six-figure assessment down to zero.