
Received an IRS Letter 226-J? Let’s Reduce What You Owe.
$650M+ in IRS penalties mitigated since 2017
An ACA penalty notice doesn’t have to be the final word.
If you’ve received IRS Letter 226-J, Letter 227, or another Employer Shared Responsibility Payment (ESRP) notice, our ACA specialists can help you understand what triggered the penalty, evaluate your options, and build a response designed to reduce or eliminate your exposure. Our ACA penalty consultants work directly with your HR team—and when appropriate, alongside your ERISA attorney—to prepare a complete response package.
Since 2017, we’ve helped employers mitigate more than $650 million IRS penalties by identifying reporting issues, uncovering coding errors, and developing defensible response strategies.
How Our ACA Penalty Reduction Process Works
Your role: Send us your IRS notice and supporting documentation.
Our role: We review the letter, identify deadlines, assess the proposed penalty, and determine what information is needed.
Outcome: You gain a clear understanding of your situation and next steps.
Your role: Provide requested reporting and coverage information.
Our role: We analyze Forms 1094-C and 1095-C, employee records, and filing data to uncover the root cause.
Outcome: We identify reporting errors, coding discrepancies, or other factors that may have contributed to the penalty assessment.
Your role: Review recommendations and provide final approval.
Our role: We prepare supporting documentation, complete applicable response forms, and develop a response strategy tailored to your circumstances.
Outcome: You have a structured, defensible response backed by ACA specialists
Your role: Submit the response or authorize us to assist throughout the process.
Our role: We support your response efforts and help address IRS follow-up requests when applicable.
Outcome: The strongest possible case for penalty reduction or mitigation.
Your role: Implement recommended process improvements.
Our role: We identify gaps in your ACA processes and recommend solutions that support ongoing compliance.
Outcome: Greater confidence moving forward and a reduced risk of future IRS notices.
Who This Service is Built For



How Employers Respond to IRS Letter 226-J
-
1

1
Employer opens Letter 226-J
-
2

2
Proposed penalty: $427,000
-
3

3
The Selerix team reviews reporting.
-
4

4
Finds coding inconsistencies affecting variable-hour employees.
-
5

5
Prepares Forms 14764 and supporting documentation.
-
6

6
Submits Formal Appeal Response to the IRS then IRS reassesses.
-
Final

Final
Penalty substantially reduced.
AE2S
MVT
McElroy Trucks
Questco
AE2S
MVT
McElroy Trucks
Questco Why Employers Choose Selerix

Our specialists understand the complexities of ACA reporting requirements, IRS notices, and ESRP assessments.

More than $650M IRS penalties mitigated since 2017.

We don’t just help resolve today’s penalty. We help employers strengthen their ACA processes for the future.

Frequently Asked Questions
Letter 226-J is an IRS notice informing an Applicable Large Employer (ALE) that it may owe an Employer Shared Responsibility Payment (ESRP) under ACA regulations. The letter outlines the proposed penalty and provides instructions for responding.
Form 14764, or the ESRP Response, is an IRS form sent to Applicable Large Employers (ALEs) alongside Letter 226J to propose Employer Shared Responsibility Payment (ESRP) penalties under the Affordable Care Act. Employers use it to either agree with the penalty or formally dispute it.
Form 14765, Employee Premium Tax Credit (PTC) Listing, accompanies Letter 226-J and lists the employees whose Premium Tax Credits contributed to the proposed ACA penalty. Reviewing this information carefully can help identify reporting errors, coding discrepancies, or other issues that may support a response to reduce or eliminate the proposed penalty.
Not always. Many ACA penalty notices can be addressed by experienced ACA penalty specialists who understand IRS processes, reporting requirements, and Employer Shared Responsibility Payment (ESRP) rules. In more complex situations or when legal interpretation is required, employers may also choose to involve an ERISA attorney. Every situation is different, and the right approach depends on your circumstances.
Let’s Review Your ACA Penalty Notice
If you’ve received IRS Letter 226-J or another ACA-related IRS notice, don’t wait until the response deadline is approaching.
The sooner the Selerix team can review your notice, the sooner we can begin evaluating opportunities to reduce your penalty and prepare your response.
