IRS Letter 227: Employer Shared Responsibility Review Results

Letter 227 is the follow-up to Letter 226-J. It goes to an Applicable Large Employer (ALE) after the IRS reviews the employer's response to a proposed Employer Shared Responsibility Payment (ESRP). It tells you the result of that review and what comes next.

The IRS used the Forms 1094-C and 1095-C you filed, plus the income tax returns of your full-time employees, to see whether any of them were allowed a premium tax credit. If you sent corrections with your Letter 226-J response, the IRS considered them and updated the proposed ESRP if needed.

The Six Versions

• 227-J: Acknowledges your signed Form 14764 agreement. The ESRP will be assessed and the case closes. No response needed.
• 227-K: The ESRP was reduced to zero. The case closes. No response needed.
• 227-L: The ESRP was revised. You get an updated Form 14765 (Employee PTC Listing) and a revised calculation table. You can agree or request a meeting with the manager and/or Appeals.
• 227-M: The ESRP did not change. You get an updated Form 14765 and calculation table. You can agree or request a meeting with the manager and/or Appeals.
• 227-N: Shows the ESRP after an Appeals decision. The case closes. No response needed.
• 227-O: The ESRP was revised. This version goes to Tax Exempt and Government Entities customers and includes an updated ESRP summary table and Form 14764.

What to Do

Read the letter and every attachment. If your version calls for a response, complete Form 14764 to show whether you agree or disagree. If you agree, sign the form and return it with full payment in the envelope provided. If you disagree, explain why and mark the changes needed on Form 14765. Return everything by the response date in the letter.

Before you respond, check the Forms 1094-C and 1095-C you filed for that year. The IRS used them to compute the ESRP. Also confirm that the information you sent with your Letter 226-J response was actually used.

Is This a Bill?

No. Letter 227 is not a bill. If an ESRP is assessed, you'll get a CP220J. That's the bill.

If You Disagree

Talk to the person working your case using the contact information in the letter, or write to the address shown. You have appeal rights, and the letter explains them. If you need more time, ask before the response date. To have a representative handle it, file Form 2848. It must state the year and that it covers the Section 4980H Shared Responsibility Payment. Keep copies of everything you send.

If your business received a Letter 227 and wants help with an ESRP dispute, call us at (813) 229-7100.