Letter 5699 is an Affordable Care Act information-return inquiry. The IRS sends it when records indicate an employer may have been an applicable large employer, but the IRS cannot find the required Forms 1094-C and 1095-C.
Who Gets This Letter
Employers generally fall within the applicable-large-employer rules when they averaged at least 50 full-time employees, including full-time equivalents, during the preceding calendar year. Controlled-group aggregation can cause related entities to cross that threshold even when one company alone would not.
The Consequences of Not Responding
Failure to file or furnish ACA information returns can lead to information-return penalties, and the IRS may use the data to evaluate an employer shared responsibility payment. Do not answer as though this were a general corporate income-tax filing notice.
How to Respond
First determine whether the employer was required to file for the year identified. If it was, prepare the missing Forms 1094-C and 1095-C and follow the letter's submission instructions. If it was not, respond with the workforce calculation and controlled-group facts supporting that conclusion.
If you've received Letter 5699, call us at (813) 229-7100. We can review the filing threshold and response.