The IRS Chief Counsel ruled that when sent to a church applicable large employer, Letter 226-J is a routine request under Reg. §301.7611-1, Q&A-4. The letter was an initial communication with an applicable large employer (ALE) necessary for the ALE to know that they may have a tax obligation. It also provides a preliminary employer shared responsibility payment (ESRP) that is calculated from the ALE’s own information reporting.
The letter asked an ALE whether the information in the Letter 226-J was correct, so the IRS could mechanically process, or finalize the preliminary calculation of a liability. The IRS asked the church to confirm the accuracy of the information in the Letter 226-J, with both processes culminating with mechanical processing of the return or the information from the Letter 226-J process.