In a recent TXCPA Federal Tax Policy Blog, Shareholder Leo Unzeitig discusses the pivotal ruling out of the Northern District of Texas, Faulk Company, Inc. v. Becerra, where the court sided with the taxpayer and determined that the IRS overstepped its authority in assessing Employer Shared Responsibility Payments (ESRPs) under the Affordable Care Act (ACA). In the article, Unzeitig emphasizes that this decision underscores a key legal flaw: the ACA explicitly assigns certification duties to HHS, and the IRS cannot simply step in. The result? A full refund of over $200,000 to Faulk and a regulatory provision struck down as unenforceable.
According to Unzeitig, this case should be on every employer’s radar— especially those who received IRS Letters 226-J in the past two years. While the ruling may be appealed, the potential implications are wide-reaching and cannot be ignored. Unzeitig encourages employers to consider filing a protective refund claim with the IRS to preserve their rights if Faulk’s reasoning is sustained on appeal.
Read the full article here.