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Noncompliance with ACA could trigger IRS audit, prosecution

Many business practices can attract scrutiny as possible tax fraud

Obamacare is still the law of the land. Failure to extend coverage or make Affordable Care Act payments can result in a tax audit and civil penalties or even charges of tax fraud.

Avoiding ACA obligations joins the long list of red flags that might cause your business and/or your personal finances to be audited. If the IRS concludes that you are willfully noncompliant, it may pursue civil and criminal sanctions.

Respond promptly to an ACA exchange notice

President Trump quipped “Nobody knew health care could be so complicated.” Employers certainly know how complex it is, especially those who are struggling with the mandates of the Affordable Care Act or confronted with a notice from a state health care exchange.

An exchange notice should be dealt with swiftly, advises Accounting Today. Waiting only invites an IRS audit, with the possibility of thousands of dollars in penalties. In the worst case scenario, shoddy record-keeping, failing to offer coverage to qualified employees, or failing to make a shared responsibility payment to the IRS could be construed as tax fraud (tax evasion).

What else raises IRS red flags?

In addition to failing to comply with the ACA or respond to a health exchange notice, other business practices can trigger audits or tax fraud investigations:

Whether you have made honest mistakes or knowingly fudged taxes, you will eventually need to make things right with the IRS. However, if the IRS is asking questions or if you think there is any possibility of being prosecuted for tax fraud, consult with a criminal defense attorney before talking with an IRS auditor or agent. Your statements can be misconstrued or used as leverage against you.

Source: Tax Avoidance Is Legal. Tax Evasion Is Criminal. (