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The Affordable Care Act (ACA) imposes a Patient-centred Outcomes Research Institute (PCORI) fee on issuers of specified health insurance policies as well as plan sponsors of applicable self-insured health plans. This annual fee is filed and paid on IRS Form 720, and it goes for research, which then evaluates whether medical treatment works. The PCORI fee payment due date is usually on July 31st of the next year following the plan year. Not meeting this deadline will result in penalties and interest charges.

If the date for the PCORI fee payment was disregarded by the payer, the IRS may charge a penalty for non-payment and interest on the outstanding amount. Despite the fact that the IRS has not made an official announcement regarding the penalty for late PCORI payments, standard failure-to-pay penalties may be applicable. The latter consists of a 0.5% monthly penalty for the unpaid tax, capped at 25%, in addition to daily accruing interest based on federal rates. This can be very expensive, especially in the case of long delays in the payment.

When a PCORI fee payment is avoided, the IRS usually takes the action of sending a letter or a notice to the responsible person. This notice contains the total amount due, including all the incurred penalties and interest. It is very critical that the taxpayer should not disregard the notice by replying promptly and making the full payment; this might stop any further enforcement by the authorities. There are situations where either a plan sponsor or an insurer is permitted to request a waiver of penalties when they provide a legitimate reason for the delayed payment, such as natural disasters or avoidable operational errors.

So as to steer clear of penalties in the future, plan sponsors have to keep a compliance calendar with IRS deadlines marked clearly. Most of the enterprises would either partner with tax professionals or use e-filing platforms, ensuring that deadline reminders were sent to them and that they were guided to avoid common filing mistakes. Setting internal deadlines a few weeks ahead of the actual due date can also is an aid to provide a buffer for any unexpected issues that might delay the submission and payment.

Besides being an indication of late PCORI fee payments, a failure to adhere to deadlines is considered a high-risk issue that could attract considerable penalties and accrued interest. Getting the complete information about IRS requirements and a well-prepared program far in advance can protect your firm from any loss and unnecessary tension. Also, if you have missed the deadline, a quick response to solve the issue and the advice of the professionals can lower the consequences.