How We Eliminated A Multi-Million Dollar Employer Mandate Penalty



  • Kentucky-based payroll firm serving as the parent company for several mid-sized entities
  • Oversees benefits for more than 20,000 employees


  • Client received IRS penalty letter with $32 million fine for failing to comply with the Affordable Care Act (ACA)
  • IRS gave client only 30 days to respond, a process that involved sorting through hundreds of enrollment records & IRS filings

The MZQ Solution

By preparing all the necessary paperwork, submitting both responses in advance of the IRS deadline, and navigating the IRS relationship, we saved over fifty hours of administrative work for our client. We prevented the client from having to wait weeks for an update from the IRS by sharing their revised penalty the same day each response was submitted, thanks to our IRS network.

Our preliminary response drastically reduced the client’s fine from $32 million to just $140,000; our final response eliminated the remaining penalty.


Research & Analysis

  • Employer Shared Responsibility Payment (ESRP) Consulting Team applied expert ACA Reporting knowledge to decipher penalty letter, pinpointing filing errors that resulted in a steep fine
  • Dedicated ESRP Consultant led a conversation with client to (a) put them at ease (b) share team’s analysis of the penalty letter (c) gather company details necessary to craft their response (d) outline path forward


  • ESRP Consulting Team cultivated a relationship with client’s IRS representative to access insider appeal status updates
  • Using insight gained from previous response preparation, ESRP Consultant tackled the penalty in two phases:
    1. Intending to eliminate majority of the penalty, consultant submitted preliminary response that corrected company-level form on file with IRS
    2. Consultant then, per IRS requirements, hand-corrected several hundred erroneous codes on employee forms to erase remaining penalty in final response

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