The Patient Protection and Affordable Care Act (ACA) added the employer shared responsibility provisions in IRC 4980H. Employers with 50 or more full-time employees, including full-time equivalent employees, are referred to as Applicable Large Employers (ALEs). Effective beginning in calendar year 2015, IRC 4980H provides that generally an ALE must offer minimum essential coverage (MEC) that provides minimum value (MV) and is affordable to its full-time employees and their dependents, or make an Employer Shared Responsibility Payment (ESRP) to the IRS if at least one of its full-time employees is allowed a premium tax credit (PTC) on their Form 1040, Individual Income Tax Return, in connection with purchasing health care coverage through the Health Insurance Marketplace, also known as the Exchange (Marketplace/Exchange).

The ACA also added IRC 6055 and IRC 6056. IRC 6055 requires every provider of MEC (such as health insurance issuers, plan sponsors of self-insured group health plans, sponsors of multi-employer plans, and providers of government-sponsored plans) to report coverage information by filing an information return with the IRS and furnishing a statement to individuals. Information returns filed by health insurance providers under IRC 6055 are:

IRC 6056 requires an ALE to file information returns with the IRS and to provide statements to full-time employees about the health coverage offered. The IRS will use the information provided on Form 1094-C, and Form 1095-C, to administer the provisions of IRC 4980H. In addition, the IRS will use the information about offers of coverage to determine whether the employee may be eligible for the PTC under IRC 36B.

The Internal Revenue Code:

The ESRP provisions are governed by Policy Statements and other internal guidance that apply to all Service personnel regardless of operating division. The Policy Statements found in IRM 1.2, Servicewide Policies and Authorities, Policies of the Internal Revenue Service, apply to all programs addressed in this IRM section. Examiners should review these Policy Statements to properly perform their assigned duties.

A website, Delegation Orders by Process, located at https://www.irs.gov/uac/delegation-orders-by-process1, summarizes data contained in the applicable IRM sections under IRM 1.2, relating to Delegation Orders, in a single, electronic source.

IRM 25.21.4 serves as the foundation for consistent administration of the ESRP provisions. By providing one source of authority, the Service greatly reduces philosophical and procedural inconsistencies.

Director, Specialty Examination Policy, is responsible for the procedures and updates addressed in this IRM.

Director, Examination Specialty Tax, and Director, Examination Campus, are the executives responsible for operational compliance.

Program Reports: Information regarding the program effectiveness are included on, but not limited to:

Program Effectiveness: Program goals are measured with periodic program reviews that monitor whether established procedures are applied uniformly and consistently. The program reviews will be conducted periodically by the analysts assigned the program. The program goals will also be measured by Campus Embedded Quality Performance Reports that monitor whether quality attributes are applied uniformly and consistently.

Annual Review: Employment Tax Policy - Program Manager, is responsible for reviewing the information in this IRM annually to ensure accuracy and promote consistent tax administration.

The following table lists commonly used acronyms and their definitions:

The following table lists the terms and their definitions:

The following table lists the primary sources of guidance:

Helpful information sources include:

The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. Employees are responsible for being familiar and acting in accordance with taxpayer rights. See IRC 7803(a)(3). For additional information about the TBOR, see https://irssource.web.irs.gov/SitePages/TaxpayerBillOfRights.aspx and IRM 1.2.1.2.35, Policy Statement 1-236, "Fairness and Integrity in Enforcement Selection."

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal procedures, or who believe that an IRS system or procedure is not working as it should. Pub 1546, Taxpayer Advocate Service - We Are Here to Help You, provides contact and additional information. The program is designed to alleviate taxpayer hardships that arise from systemic problems or the application of the IRC. In addition, see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, and IRM 13.1.19, Advocating With Operations Assistance Requests (OARs), for additional information.

Information Return Case Selection (IRCS) will use a list of identified non-filers to establish selection criteria and prioritize the information return non-filer cases in anticipation of work requests. Selected cases will be controlled on the Examination Returns Control System (ERCS), data will be provided to the assigned group and letters will be mailed by the National Distribution Center (NDC).

Cases will be established on ERCS using the following for case controls and coding:

Cases will only be established on ERCS; they will not be on Master File. The Inventory Control Listing (IVL) from ERCS will be used to help monitor inventory. Management will use reports from ERCS and other sources to provide information on program results.

Cases established on ERCS that will not receive an inquiry letter will be closed using a non-examined disposal codes (DC) defined below:

An electronic case file folder for each selected case will be established on the shared server established specifically for working information return non-filer cases. The following naming convention will be used for all case folders: "YYYYNF_NNNNN" where:

All electronic case file folders will include:

If delinquent information returns are submitted, the examiner will submit them for processing using the appropriate address found in the instructions: Instructions for Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. The returns will not be scanned into the electronic case file folder, but the examiner will document receipt and processing in the case notes.

Letter 5699, Missing Information Return Form 1094/1095-C Letter, is used to make initial contact with the employer. These letters are mailed by NDC through batches provided by IRCS.

Letter 5699 provides the employer a reason for the contact and gives them general information about the filing requirements for Form 1094-C and Form 1095-C. It asks the employer to respond to the letter by marking the appropriate block and returning it as directed in the letter.

All correspondence should be prepared using approved form letters with approved language. Original correspondence created by examiners must be:

The letter can be signed using an electronic signature.

At the time the inquiry letter is mailed, the MFT "43" will be updated with a Transaction Code (TC) "971" and Action Code (AC) "784" by following local procedures for making the update. These codes will indicate an information return inquiry letter was sent. If no MFT "43" module is present, input of this code will establish it on the system.

The Letter 5699 gives the employer response choices regarding their filing situation. The letter asks the employer whether they:

If penalties are appropriate, the examiner will:

The manager will review the penalty case file and sign the penalty request upon approval.

The clerk will establish ERCS Controls for non-filed Forms 1094-C and/or Forms 1095-C using:

The clerk will print Letter 5005-A and the Form 886-A enclosure and mail the package to the ALE.

Use normal group procedures to compute and assess the penalties. See IRM 20.1.7, Information Return Penalties, for additional information.

The examiner will prepare Form 8278 and Form 3645 for each tax year. The examiner will also complete Form 886-A outlining all pertinent information; issues, facts, law, employer’s position, and conclusion

The case will be submitted for managerial review and signature on Form 8278.

Upon approval, Letter 5005-A will be prepared by clerical and mailed to the ALE with a completed Form 886-A. This letter provides information to the ALE about the penalties and next steps depending on whether they disagree or agree with the proposed penalties.

Non-filer inquiry cases (MFT "Y1" ) with no related penalty case file will be closed using the following procedures:

A two-step closing process is required when there is a penalty case file. Both cases should be resolved and closed at the same time.

For the non-filer inquiry case,

The penalty case will be closed using the following steps:

ERCS controls will be established as follows:

Open TXMOD control on MFT "13" , enter Activity: FIRSTREAD

Determine if information provided by employer supports correcting Failure to Timely File and/or Failure to Timely Furnish Penalties. See IRM 25.21.4.6.3.1, Employer Response to Correcting Failure to Timely File and/or Failure to Timely Furnish Penalties, for guidance.

The penalty case will be closed using procedures in IRM 25.21.4.6.3.2, Closing a Request for Correction of Non-Filer Penalties.

The following disposal codes are used with non-filer inquiry cases:

An employer determines if it is an ALE for a current year based on the number of its full-time employees (including full-time equivalent employees) during the preceding calendar year.

A "new employer" is defined as an employer that was not in existence on any business day in the preceding calendar year. A new employer is an ALE for the current calendar year if it reasonably expects to employ, and actually employs, on average, at least 50 full-time employees (including full-time equivalent employees) on business days during the current calendar year.

Generally, IRC 4980H applies to an employer with employees working abroad (U.S. citizens or non-citizens) only if the employer has at least 50 full-time employees (including full-time equivalent employees) performing work in the 50 states and Washington, D.C. For this purpose, the hours of service that a full-time or full-time equivalent employee works do not include an hour of service to the extent the compensation for services performed constitutes income from sources outside the United States.

Generally, all employees in the preceding year are counted (either as full-time or full-time equivalent employees) when an employer is determining if it is an ALE. However, some employees are not taken into account, such as seasonal workers or those covered by TRICARE/Veterans Administration.

Seasonal Workers: Seasonal workers are defined as workers who perform labor or services on a seasonal basis as determined by the Department of Labor, and retail workers employed exclusively during holiday seasons. An employer is not considered to have more than 50 full-time employees (including full-time equivalent employees) if both of the following apply:

TRICARE/Veterans Administration Coverage: An employee is not counted toward the 50 full-time employee (including full-time equivalent employees) threshold for a month in which the employee has coverage through TRICARE or a Veterans Administration health program (as described in IRC 4980H(c)(2)(F), "Exemption for Health Coverage Under TRICARE or the Veterans Administration" .)

Other Employees Not Taken into Account: If an employer hires additional employees, including some part-time employees, during the current year, the employer will take those employees into account when determining whether it is an ALE for the next year.

Employees (U.S. citizens or non-citizens) working only outside the United States generally are not taken into account in determining whether an employer is an ALE and whether the employer owes an ESRP, or the amount of any such payment.

Except as noted above, an employer must count all of its employees from the preceding year in determining whether it is an ALE, even if an employee is exempt from the individual shared responsibility provision. Exempt employees include members of a Health Care Sharing Ministry, members of a Federally-recognized Indian tribe, or an employee eligible for coverage through another source, such as Medicare, Medicaid, or a spouse’s employer.

A "full-time employee" is an employee who, for a month, has on average at least 30 hours of service each week or at least 130 hours of service during the month.

For purposes of determining whether an employer is an ALE, an employee is an individual who is an employee under the common-law standard for determining employer-employee relationships.

For IRC 4980H, an employee does not include:

An employer determines its number of "full-time equivalent employees" for a month by combining the number of hours of service of all non-full-time employees for the month (but not including more than 120 hours of service per employee), and dividing the total by 120. For detailed rules on how to determine full-time equivalent employees, see Treas. Regs. 54.4980H-2(c).

The number of full-time equivalent employees is relevant only to determine if an employer is an ALE. Full-time equivalent employees are not taken into account in determining whether an ALE owes an ESRP or when calculating the amount of any payment.

Example: An employer that employs 40 full-time employees and 20 part-time employees each with 60 hours of service per month is treated as having 50 full-time employees for determining ALE status, determined as:

Under IRC 4980H, an hour of service is each hour for which an employee is paid or entitled to payment for the performance of duties for the employer. Hours of service also include each hour for which an employee is paid or entitled to payment for any period during which no duties are performed due to holiday, vacation, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

In certain situations, some hours for services performed are excluded from the definition of hour of service and not counted as hours of service for purposes of determining whether the employer is an ALE. These situations include hours of service:

When an employee has hours that are challenging to identify or track, an employer must use a reasonable method of crediting hours consistent with IRC 4980H. See IRM 25.21.4.7.5.1, Crediting Hours, for examples of how to calculate hours.

For purposes of IRC 4980H, a dependent is defined as an employee’s child, including a child who has been legally adopted or legally placed for adoption with the employee, who has not reached age 26. A child reaches age 26 on the 26^th anniversary of the date the child was born and is treated as a dependent for the entire calendar month during which he or she reaches age 26.

For purposes of this provision, a dependent does not include a stepchild, a foster child, or a child who does not reside in the United States (or a country contiguous to the United States) and who is not a United States citizen or national. In addition, a dependent does not include a spouse.

The PTC is a refundable tax credit for eligible individuals and families with low or moderate incomes to help with the cost of health coverage purchased through the Marketplace/Exchange. The PTC generally is available to help pay for coverage purchased through the Marketplace/Exchange for individuals who:

Employer-provided coverage is considered affordable for an employee if the employee’s required contribution does not exceed 9.5 percent (adjusted annually - see "Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act" Q & A #39 and Q & A #40) of that employee’s annual household income.

Determining whether coverage is affordable for an employee requires a calculation based on many components, including:

If the ALE offers coverage to less than 95 percent (70 percent for 2015) of its full-time employees and their dependents, and at least one full-time employee was allowed a PTC for coverage purchased through a Marketplace/Exchange, there is a potential ESRP under IRC 4980H(a).

For the purpose of IRC 4980H(a), all full-time employees are taken into account even if they were offered coverage by the ALE, have coverage from another source, or are not required to have coverage under the individual shared responsibility provisions. ALEs report the number of their full-time employees for each month on Form 1094-C, lines 23-25, column (b).

Under IRC 4980H(a), the ESRP liability may be reduced by up to 30 full-time employees. If the ALE Member is in an Aggregated ALE Group, the reduction of 30 full-time employees is allocated among all related ALE Group Members in proportion to each ALE Member’s number of full-time employees.

If the ALE Member offers coverage to at least 95 percent (70 percent for 2015) of its full-time employees and their dependents but one or more full-time employees were allowed the PTC for coverage purchased through the Marketplace/Exchange, there is a potential ESRP under IRC 4980H(b) if:

The potential ESRP under IRC 4980H(b) for one month is calculated as:

Although IRC 4980H originally was intended to apply in 2014, transition relief provides that IRC 4980H and the corresponding information reporting requirements first apply in 2015, and an ESRP will not be assessed with respect to 2014. See Notice 2013-45.

There are eight forms of transition relief for 2015 that apply to various aspects of IRC 4980H. Each form of relief is described briefly in the following subsections below, but is fully described in section XV.D of the preamble to the final Treasury Regulations 54.4980H. In addition, see the "Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act" at: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act.

In general, if an employee was not offered coverage at any point during the prior calendar year and the ALE offers coverage to the employee on or before April 1 of the first calendar year for which the employer becomes an ALE, the ALE will not be subject to an ESRP by reason of its failure to offer coverage to the employee for January through March of that year, and with respect to potential liability under IRC 4980H(b) for January through March of that year, only if the coverage offered by April 1 provides minimum value. This rule only applies during the first year that an employer is an ALE. See Treas. Reg. 54.4980H-2(b)(5) for additional information.

If the assigned examiner finds the ALE is part of an aggregated group, steps will be taken to work the cases together.

The examiner will take steps to have all existing cases assigned to them to work together. This may involve having the manager transfer the ECF from other examiners. If one of the related entities is not an existing case, the examiner will coordinate with the manager to obtain information from IRCS and establish a new case when necessary to allow for all related entity cases to be worked together.

The examiner will determine if the related entities have filed the information returns by using CC IRPOL.

For Examination Field cases: If the ALE does not respond to the Letter 226-J within thirty days, the examiner will attempt to make phone contact with the ALE. If the examiner is able to make phone contact, they will take the following steps to resolve any issues:

If the case is being worked by a campus examiner, Letter 5040-J, a copy of Letter 226-J and all attachments will be mailed to the ALE when there is no response to the Letter 226-J. The Letter 5040-J allows the ALE fifteen days to respond. If the ALE does not respond, the case will be prepared for assessment. If the ALE does respond, the examiner will follow the appropriate procedures to address the response.

If the ALE returns a signed and dated ESRP Response Form with the "Agreement with proposed assessment" box checked, Letter 227-J, Employer Shared Responsibility Payment (ESRP) Acknowledgment Closing Letter, will be mailed to the ALE. The examiner will assess the ESRP using local procedures and close the case.

If the ALE returns the ESRP Response Form with the "Partial/Total disagreement with proposed assessment" box checked, a signed statement or other supporting documentation explaining the partial or total disagreement should be enclosed. If the ALE indicates disagreement with the ESRP via a telephone conversation, the examiner will ask them to follow instructions in the Letter 226-J and provide their reasons for disagreement with any requested corrections in writing.

If the ALE returns the ESRP Response Form but does not provide either a signed statement or other supporting documentation explaining any disagreement with the proposed ESRP, the examiner will attempt to contact the ALE to resolve the issues. If no signed statement or reason for disagreement is provided, the examiner will issue the appropriate Letter 227. See IRM 25.21.4.15, Letter 5040-J Follow Up Letter and Letter 227 ESRP Acknowledgement Letters, for a list of the various Letter 227 options.

If the ALE requests in writing affordability verification by providing their computation for reconsideration of affordability based on household income, Form W-2, federal poverty line or rate of pay safe harbor, the examiner will recompute affordability to determine if coverage is affordable. After the examiner documents the case file, the examiner will respond to the ALE with either Letter 227-K or Letter 227-L and the Explanation of Recalculated Employer Shared Responsibility Payment.

The examiner will review the signed statement and any reason for disagreement to determine if it supports making changes to the proposed ESRP. If the information provided does not support the response, discuss the case with the manager to determine the next steps. See IRM 25.21.4.14.3.1, Review Techniques.

IRC 7611 provides guidelines and a procedural framework for certain examinations of churches. Also see Treas. Reg. 301.7611-1.

If the ALE self-identifies as a church in response to the Letter 226-J or subsequent correspondence, the examiner will stop processing the case immediately. These cases will be worked by TE/GE.

Provide the EIN, ECF and/or Record Number of the case to the group manager. The group manager will transfer the case to TE/GE using local procedures.

The ALE may not have responded to the preliminary Letter 226-J but may provide a response to a Letter 227-L, Revised ESRP Calculated, or Letter 227-M, ESRP Acknowledgement - Revised ESRP Unchanged. There are three potential responses:

If the ALE does not respond to the Letter 227-L or Letter 227-M by the date indicated in the letter (generally within 30 days), the examiner will close the case using the appropriate procedures and disposal code. See IRM 25.21.4.19, Case Closing Procedures, for appropriate closing procedures.

If the ALE returns a signed and dated ESRP Response Form with the "Agreement with proposed assessment" box checked, the examiner will mail the Letter 227-J to the ALE, assess the ESRP, and close the case. See IRM 25.21.4.19, Case Closing Procedures.

The employer may still disagree with the proposed ESRP and may either:

If the ALE requests a meeting with the supervisor, the examiner will forward the information to their supervisor. The supervisor will contact the ALE to discuss the issue. The case will be processed based on the outcome of the meeting.

An ALE request for an Appeals conference must include a valid protest. When the total amount of the proposed ESRP for all months of the applicable year is $25,000 or less, a small case request may be requested by letter for an Appeals hearing along with the reasons the ALE does not agree. When the amount of the proposed ESRP for all months of the applicable year is more than $25,000, the ALE must submit a formal written protest. See IRM 25.21.4.16, Appeals Procedures.

The examiner will prepare the ECF to be submitted to Appeals by taking the following steps:

The group manager will send the ECF to Appeals by uploading it to an Appeals SharePoint site for Appeals’ consideration.

Controls will remain with the examination group while Appeals works the case.

After Appeals has worked with the employer to resolve the unagreed issues, the Appeals Officer will make a determination based on the information provided regarding the proposed ESRP.

When changes are made to the proposed ESRP, the Appeals Officer will return the Form 14765 with any changes via *SBSE ESRP Issues mailbox requesting the revised ESRP computation.

The examiner will use the information provided by Appeals to recalculate the ESRP and will return the revised ESRP Summary Table and updated Form 14765 to Appeals.

The Appeals Officer will provide the revised ESRP Summary Table and Form 14764 to the ALE and request a signed agreement form.

Upon case completion and approval, Appeals will mail the paper documents to the group via Form 3210, Document Transmittal, to associate with the file. Any electronic documents will be forwarded in a secure email via *SBSE ESRP Issues.

The examiner will prepare and mail Letter 227-N, ESRP Acknowledgement - Appeals Determination, to the ALE and close the case using the appropriate procedures and DC. See IRM 25.21.4.19, Case Closing Procedures.

The following table provides the disposal code and definition for use when closing the ESRP case file in ERCS. As there are no controls on AIMS, there is no need for a Form 5344 , Examination Closing Record.

For all examination field cases, Form 3870 must be completed to start the closing process. Form 3870 is available in the ECF. There are three potential edits to the Form 3870 by the examiner:

All three edits are stored within the ECF and will be automatically populated for the examiner. It is the examiner’s responsibility to ensure the information is correct before submitting the Form 3870 to CCP for input.

The examiner will electronically sign a PDF of Form 3870 and forward to the group manager for review and signature.

After the group manager has signed the Form 3870, it will be sent via e-fax to CCP for input.

All ESRP cases must have a TC 29X input to ensure a subsequent reviewer knows the outcome of the review or to allow for a release of a freeze code when there is a credit balance on the module. Without input of this transaction, any credit balance cannot be refunded to the employer.

There are three potential entries for use by the examiner:

The examiner will make the assessment on MFT "43" and mark the case as closed with the appropriate disposal code. Clerical will use this information to close the case on ERCS.

All ESRP cases must have a TC 29X input to ensure a subsequent reviewer knows the outcome of the review or to allow for a release of a freeze code when there is a credit balance on the module. Without input of this transaction, any credit balance cannot be refunded to the employer.

Input of a TC 298 or TC 299 requires an interest start date. The interest start date will equal the "23C" date and will be entered by the person making the assessment.

The Form 3198, will be completed for use by the group secretary. The Form 3198 will not be sent to CCP.

The Form 3198 is stored within the ECF and will automatically populate. It is the examiner’s responsibility to ensure the information is correct before sending the Form 3198 to the manager for approval.

The group manager will approve the case for closure.

Examination Field cases: The group manager will forward the Form 3198 to the group secretary to close the case on ERCS.

Campus Cases: Approval is done through local procedures.

The clerk is responsible for closing the case directly to Status "90" for manager approval.

The ECF will be maintained on the server for use in working Form 843 claim requests or the required Time-Based Reviews (TBR) .

Cases assigned as an ESRP case can result in meeting Transition Relief "A" based on a response from the ALE after receipt of Letter 226-J, Letter 227-L, or Letter 227-M. If the examiner is accepting information from the ALE certifying that they met Transition Relief “A” no ESRP assessment will be made.

Transaction Code "971" and Action Code "781" will be input on MFT "43" to indicate Transition Relief "A" was met.

Since no assessment is being made due to "A" relief, the examiner will take steps to input a TC 290 "0" .

The case will be closed as a no-change using DC "01" . See IRM 25.21.4.19.1, Appropriate Disposal Codes.

Cases designated as having Transition Relief "A" based on information returns filed by the ALE but have a credit balance on the module will be assigned to the examiner to ensure resolution of the credit balance.

The case will be closed as a no-change, DC "01" after the input of the TC 290 "0" using local procedures. The input of the TC "290" will release the freeze code and allow the credit balance to be resolved.

Since the ALE does not owe an ESRP due to claimed transition relief, there will be no letters issued to the ALE. The case will simply be closed as a no-change DC "01" to release the credit balance back to the ALE.

ERCS controls will be established as follows:

Input TC "971" , AC "013" (Examination Field cases) or AC "015" (Campus cases) on MFT "43" to indicate a claim was forwarded to Exam to be worked. When resolved, the module will reflect either a TC 290 "0" (indicating the claim was not accepted/disallowed in full), or a TC "299" (to abate the portion of the claim that was allowed).

Contact the employer to let them know you have received the request:

Determine if information provided supports recalculating the ESRP. If not, call the employer to discuss what information is needed. If so, enter the new information in the ECF and recalculate the amount.

Issue Letter 570, Claim Allowed in Full, if the amount requested will be allowed in full.

Issue Letter 5985, Claim for Refund Full or Part Disallowance, if the amount requested is being allowed in part or disallowed in full.

Letter 5985 will include:

If Appeals is requested, following normal procedures for ESRP cases. Appeals will follow the established ESRP procedures and request recalculation from the examiner, if appropriate. Appeals will resolve the claim for refund with the employer and return the file to the examiner to complete the final assessment (if any) and close the case. If no agreement is reached, Appeals will issue the formal Notice of Claim Disallowance. A copy of that letter will be provided to the examiner for inclusion in the ECF. The examiner will issue Letter 227-N to the employer.

If the ALE does not agree with the full or partial claim disallowance and does not request an appeal, the examiner will prepare the case for the issuance of the Statutory Notice of Claim Disallowance.

Examination Field cases: The Statutory Notice of Claim Disallowance is issued by Technical Services:

Campus cases: The Statutory Notice of Claim Disallowance will be issued when appropriate.

ERCS controls will be established as follows:

Input TC "971" , AC "013" (Examination Field cases) or AC "015" (Campus cases) on MFT "43" to indicate a reconsideration was forwarded to Exam. When resolved, the module will reflect either a TC 290 "0" (indicating the reconsideration was not accepted/disallowed in full), or a TC 299 (to abate the portion of the reconsideration that was allowed).

Contact the employer to let them know you have received the request:

Determine if the request for reconsideration meets established criteria. If it does not, the examiner will inform the employer the request will not be considered. Letter 916-C, Claim Incomplete for Processing; No Consideration, can be used.

If the employer has information that was not previously considered, review it to determine if it supports recalculating the ESRP:

Issue Letter 2738, Audit Reconsideration-Complete Abatement, if the amount requested will be allowed in full.

Issue Letter 5983, ESRP Recon Request Disallowed in Full, if there will be no change made to the previous assessment.

Issue Letter 5984, ESRP Recon Request Allowed in Part, if there is a change to the original assessment.

Letter(s) 5983 and 5984 will include:

If the employer appeals, send case to Appeals following ESRP procedures. Appeals will follow the established ESRP procedures and request recalculation from the examiner, if appropriate. Appeals will resolve the request for reconsideration and return the file to the examiner to complete the final abatement (if any) and close the case. The examiner will issue Letter 227-N to the employer.

If no agreement is reached and the ALE does not request Appeals, the examiner will close the case based on the recalculation, if any, made after the information provided with the request has been considered.

Reasonable Cause is not applicable to ESRP.