Employers may have received one or more Letters 227 from the IRS. These letters are acknowledgement letters closing an employer shared responsibility payment (ESRP) inquiry or providing next steps for an ESRP assessment.
There are five different versions of Letter 227:
- Letter 227-J acknowledges receipt of the signed ESRP Form 14764 Agreement and confirms that the ESRP will be assessed. After issuance of this letter, the case will be closed. No response is required.
- Letter 227-K acknowledges receipt of the information provided in a Form 14764 response document and shows the ESRP has been reduced to zero. After issuance of this letter, the case will be closed. No response is required.
- Letter 227-L acknowledges receipt of the information provided in a Form 14764 response document and shows the ESRP has been revised. The letter includes an updated PTC listing and revised calculation table. The ALE can agree or request a meeting with the manager and/or appeals.
- Letter 227-M acknowledges receipt of information provided in a Form 14764 and shows that the ESRP did not change. The letter provides an updated PTC listing and revised calculation table. The ALE can agree or request a meeting with the manager and/or appeals.
- Letter 227-N acknowledges the decision reached in Appeals and shows the ESRP based on the Appeals review. After issuance of this letter, the case will be closed. No response is required.
Steps to Take
An employer who receives Letter 227 should read it and all attachments carefully. The documents will explain next steps and proposed resolution. If any response forms are required, they should be submitted. Different instructions apply depending on if you agree or disagree with the revised penally.
Frequently asked questions from the IRS website
- Why did I receive this letter?
The IRS used the information you provided in response to the initial Letter 226-J to review your ESRP. The Letter 227 version that you received explains the outcome of that review and the next steps to take to fully resolve the ESRP. - Where did the IRS get the information used to compute the ESRP?
The IRS used Forms 1094/5-C filed and the income tax returns of your full-time employees to identify if they were allowed a premium tax credit. If changes to that information were submitted in response to a Letter 226-J, the IRS considered that information and, if needed, updated the proposed ESRP. - Is this letter a bill?
No, the Letter 227 is not a bill. A CP220J, a bill, will be received after the ESRP has been assessed. - What do I need to do?
Review the letter and attachments carefully and complete and return the Letter 227-L or 227-M by the date provided. - What do I do if the information is wrong or I disagree?
Discuss your issues or concerns with the person working your case. Use the information provided on the letter to contact us or send us your questions in writing to the address shown on the letter. - Do I have appeal rights?
Yes, the letter you receive will explain all of your rights, including your right to appeal.
