Already have Letter 226‑J instead? That’s a different letter with a different fix →
Think of Letter 5699 as 226‑J’s quieter cousin: instead of disputing a filing you made, it’s asking why no filing showed up at all.
What triggers it
The IRS builds its list of likely Applicable Large Employers from data it already has, like your W‑2 counts and third-party reporting. When this flags an employer with missing 1094‑C/1095‑Cs, Letter 5699 goes out.
Its official title is blunt: Missing Information Return Form 1094/1095‑C Letter. (IRM 25.21.4.4.3) Getting one doesn’t mean you’re non-compliant.
The four response options
Filed under another EIN
Provide the business name, EIN, and exact filing date.
Should have filed, but didn’t
Submit delinquent forms now or provide the electronic filing date.
Not actually an ALE
Explain why you did not meet the 50‑FTE threshold.
Other explanation
A catch-all option. For example, sending paper forms when electronic filing was legally required.
Resolve it and you’ll get Letter 5840, the closing letter: no penalty, no further action (IRM 25.21.4.4.4.2).
What happens if you ignore it?
Respond by the date printed on the letter, not the day you open it. Ignoring it triggers a strict IRS escalation sequence:
- 5698
Still open. A second, more pointed request if 5699 goes unanswered (IRM 25.21.4.4.4.1). Not a formality — it’s the last stop before a penalty case file opens.
- 5005‑A
Penalty proposed. If 5698 also goes unanswered, an examiner is assigned, attempts phone contact, and if unresolved, the IRS issues a penalty proposal with Form 886‑A (IRM 25.21.4.4.4.1) laying out facts and calculations.
The distinction most coverage blurs
5699 and its escalation path lead to penalties under §6721/§6722 (IRM 25.21.4.4) — the same failure-to-file / failure-to-furnish framework that applies to 1099s and W‑2s, calculated per return and tiered by how late it is. That is a different penalty, on a different legal basis, from the §4980H Employer Shared Responsibility Payment that Letter 226‑J proposes.
The two are linked, not independent — 226‑J only exists because a filing was on file to analyze; 5699 exists because one wasn’t.
It’s possible to get both: a 5699 response may initiate a late filing, or reveal a lost one. Either could later surface a §4980H problem, and with it a 226‑J.