Is 226J a Bill We Have to Pay?
No, 226J is not a bill. It’s a summary of the ESRP from the IRS. It’s their proposal to you and you have an opportunity to respond to it.
Whether you disagree or accept the ESRP, your first step should be to read the letter thoroughly, including any attachments, and note the deadline to respond, which is usually within 30 days. Next, contact your ACA solutions provider so you can look through the information together.
Are there any errors? Do you agree to the payment or disagree with a portion or all of what the IRS says? Prepare to respond in writing.
If you agree with it, complete and sign Form 14764 – ESRP Response, which should have been included with the 226J notice. Return it to the IRS by the response date with your payment.
There are two ways to disagree with the IRS’ assessment of your situation:
FACTUAL INACCURACY. If the information is factually wrong, follow the instructions in the letter to provide correct information to the IRS. They will follow up with you by mail.
APPEALS PROCESS. If you disagree that you owe the ESRP altogether, or disagree with the amount of the penalty, read through your rights – they’re spelled out in the 226J notice. You have a right to appeal, but you’ll need to follow the IRS process for doing so.
Whichever path you take, the IRS will acknowledge your response to Letter 226J with a Letter 227.