Why counselling small business clients on 2016 ACA penalties won’t be necessary

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June 18, 2015 by Tony Novak

Here is a different angle on why I think the small business excise tax penalty liability under IRS 4980D is a big deal right now for tax preparers:

An attorney asked if it was better to focus our attention on the tax preparer liability issue (for 2015) or how to counsel our clients for the following year (2016).

I had only considered the first issue. It should be scary enough for any tax preparer who comes to see that “I wouldn’t recognize an non-integrated or non-compliant HRA plan if it bit me”. ANd by the time you do, it is already too late. The tax penalty begins July 1.

I suspect that simply calculating the large new tax that is due with the 2015 return will be all the “counselling” that is needed. After the screaming stops and if the preparer still has a client, the only question is “why didn’t I know about this sooner”, e.g. the preparer liability issue becomes most significant.

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