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Robert S. Forman concentrates his practice in the areas of retirement plans, personal service organizations, acquisitions and mergers, corporate law, partnership law, limited liability company law, taxation and business planning. He also writes for firm's Southwest Florida Business & IP Bulletin.

Bob has extensive experience in the design and drafting of retirement plan documents, counseling of clients regarding the ongoing administration of retirement plans, and the handling of Internal Revenue Service and Department of Labor audits and corrective action filings.

In the business and transactional areas, Bob has prepared and negotiated a broad range of documents and transactions including, asset purchase, stock purchase, shareholders' employment, independent contractor and consulting agreement matters.

There is a significant increase in businesses receiving letters from the Ogden, Utah, office of the Internal Revenue Service (the “IRS”). Whether you are a business owner, member of the c-suite or HR professional, this notice is not a scam and should be taken seriously.

Below is a brief overview to help address this letter and the potential significant penalties.

Typically, the letter states the following:

“Dear [Employer],

We have made a preliminary calculation of the Employer Shared Responsibility Payment (ESRP) that you owe.

Proposed ESRP                    $X,XXX,XXX.XXX …”

When you look at the notice and realize that the amount of the proposed ESRP quite high, questions of “how” and “why” begin to formulate in the midst of unleveled anxiety. In our experience, we have found that the proposed ESRP penalties are a result of filing incorrect or incomplete Form 1094-C (“Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”) and/or Form 1095-C (“Employer-Provided Health Insurance Offer and Coverage”).

ESRP Summary Table – Minimum Essential Coverage

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heatlhcare via audio-luci-store.itThe Affordable Care Act of 2010 (the “ACA”) is one of the most complex pieces of legislation ever enacted by Congress. Nonetheless, within the morass of that very complicated legislation, there is a relatively straightforward rule applicable to “Grandfathered” Health Insurance Plans. Basically, under the ACA, a group health insurance plan in existence as of March 23, 2010, is exempt from many (but not all) of the ACA’s requirements. If, however, the employer enters into a “new” health insurance plan after March 23, 2010, then all the ACA’s requirements apply to the employers’ health insurance plan. Seems pretty straightforward, right? Well, even the relatively simple legal principles become complicated in the right (or wrong) circumstances. This blog post evaluates a specific situation where what should be a straightforward application of the ACA’s grandfathering rules becomes….not so straightforward; and also illustrates the relationship between legal requirements, and the interplay of legal options and practical considerations imposed by group health insurance carriers.

The Employer – Dental Associates of Florida, D.M.D., P.A.

The case study that is the subject of this blog post is a Florida dental practice called “Dental Associates of Southwest Florida, D.M.D., P.A.” (This is NOT its real name, of course). Dental Associates of Southwest Florida, D.M.D., P.A. (“Dental Associates”) has just been established by a young, relatively recent doctor of dental medicine whom we shall call “Dr. Julie” (also not her real name). Dr. Julie has an undergraduate degree in chemistry, and has always been interested in dental polymers. So, in addition to practicing as a general dentist, Dr. Julie also establishes a small laboratory in which she develops and creates dental crowns for her patients that require such implements.
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True, tax-exempt organizations are altruistic in nature. But even a tax-exempt organization needs to attract and retain talent.  And altruism will only go so far in landing a key executive hire. So what can charitable institutions do to give themselves a bit of an extra edge when it comes to hiring a key executive?

One option is to provide deferred compensation outside of the “typical” 403(b) or 401(k) Plan. This additional deferred compensation is often referred to as “non-qualified deferred compensation.” This post will cover the basic, non-qualified deferred compensation (“NQDC”) alternatives available to a private (i.e., non-governmental) tax-exempt organization.

Basic Rules Applicable to Tax-Exempt Organizations

Any NQDC plan sponsored by a tax-exempt entity must comply with the rules of Section 457 of the Internal Revenue Code. There are basically two (2) types of Section 457 arrangements that a tax-exempt entity can sponsor, commonly called “Section 457(b) Plans,” and “Section 457(f) Plans.”
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