CLAREMONT — The Claremont School District will not have to pay the Internal Revenue Service close to $320,000 in fines for failing to submit two forms related to the Affordable Care Act for the 2016 tax year.
The district received a notice from the IRS in April stating that because it had not filed the forms on “employee-provided health insurance offer and coverage,” it was being assessed the fines.
“Because the employer did not respond to the inquiry letters, the Failure to File/Failure to Furnish penalties are being proposed,” says the April 1 letter from Shan Montoya, operation manager in the Ogden, Utah, office.
After receiving the notice, the district submitted the forms, leading the IRS to decline further action.
“We received your information in response to our inquiry dated April, 1, 2019. Your information resolved our inquiry and you don’t need to do anything more at this time,” Montoya wrote.
A tax examiner with the IRS, who declined to give her full name, said Thursday the letter indicates the penalties won’t be assessed.
John Aubin, who was hired in the spring on a part-time basis to handle the district’s finances, said Thursday they not only completed the forms for 2016 but also 2017 and 2018, though no fines had been levied for the most recent two years.
“We went to work to get it done and spent hours and hours on it,” said Aubin, crediting SAU staff for their efforts to complete the forms. “It is an enormous undertaking. I think there are probably thousands of employers like us.”
The 17 pages of IRS instructions state that a 1095-C form must be completed by the employer for each full-time employee of the district and include the coverage offered for each month and the employer contribution. The district also is required to give each employee a copy of the form.
Aubin, who retired last year after working at several school districts in the Upper Valley since the 1980s, including Lebanon, Claremont, Windsor and Dresden, said the IRS delayed requiring employers to submit the forms in the early years of the Affordable Care Act — implemented in 2013 — but that changed in 2016, and now both forms must be filed each year.
According to the April 1 IRS letter, the district was hit with two separate fines. The first for $159,380 was for failure to file a return for each employee, and the second for $159,120 was for failing to furnish a statement to each employee. The penalty amounted to $260 per employee.
When the fines were made public by the school district in June, officials blamed the errors on the former director of business and finance for the SAU, Mike O’Neill, who no longer is employed with the district. It’s not clear if he resigned or was fired.
Acting Superintendent Cory LeClair at the time, and current superintendent for the Cornish and Plainfield school districts, said in a news release in June that the SAU had hired legal counsel in hopes of obtaining a waiver for the fines.
Patrick O’Grady can be reached at pogclmt@gmail.
