Tag Archives: International Revenue Service

ILN Today Post

IRS Begins Issuing ACA Penalty Notices to Employers

The Internal Revenue Service (IRS) has made good on its promise to begin issuing Employer Shared Responsibility Payment (ESRP) notices to employers that have not provided adequate health insurance to their employees as required under the Patient Protection and Affordable Care Act (ACA). The ESRP notices being sent out are based on the information the IRS received from employers on their IRS Forms 1094-C and 1095-C for the 2015 tax year. Each ESRP notice includes a proposed ESRP amount for the employer to pay, an explanation for how the proposed ESRP amount was calculated, and IRS Forms 14764 (ESRP Response) and 14765 (Employee Premium Tax Credit Listing).

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Greenlight: IRS lets LLCs adopt ESOPs

A recent IRS ruling creates opportunities for Limited Liability Companies (LLCs) that want to utilize an Employee Stock Ownership Plan (ESOP). Here’s why: For many years the LLC has been the business entity of choice. It offers liability protection, design flexibility, and certain tax advantages to the owners. One of the disadvantages, when compared to a corporation, was that the LLC and its owners could not adopt an ESOP as a technique for sharing ownership with employees, for succession planning purposes, or ownership liquidation. However, that is about to change.

The rules under the Internal Revenue Code have so far limited the use of ESOPs to C- or S-Corporations. One of the requirements for an ESOP is that it invests predominantly in qualifying employer securities. LLCs were not permitted to have ESOPs because the membership units were not considered qualifying employer securities.

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