Proven Orange County EDD Appeals Lawyer
Once an EDD audit has been conducted and the results you receive contradict what your thought would be the outcome, it’s time to explore options to challenge the assessments. While it is rare to find someone who is satisfied with an EDD audit, it is also vital to request a proper assessment and review if you were not satisfied with the first one. Business owners need to know the avenues available to them in order to petition against the Notice of Assessment and the penalties are levied.
A large EDD assessment can be very overwhelming to a business owner. You are not only facing this old tax liability, but also continuing to remain current with existing tax liabilities.
Common Mistakes That Are Observed During an EDD Audit
- Lack of professional help. Sometimes business owners avoid seeking professional help and instead use their internal administrative staff to rectify the situation. Having a conversation with an educated professional with experience in tax law and EDD audits will provide the best guidance through this process. Additionally, a tax professional has the ability to be an advocate for the business owner and can challenge the audit classification on behalf of the individuals. A free consultation with an EDD appeal lawyer and tax attorney is the best way to inform you what you’re facing with respect to your business and tax liability.
- Giving out both requested and non-requested information in an attempt to fully cooperate with the EDD. While the EDD will not request information that is unrelated to the documents needed for the audit, make sure you do not provide anything additional in an attempt to helpful. As such,if the do not request information, there is no reason to provide additional documentation.
- Not reviewing your federal income tax returns, bank statements, payroll records to determine if there is a discrepancy prior to meeting with the auditor.
- Sharing more than necessary. People tend to believe that being open to the EDD about how you conduct your business would bring them to your side. And as a result, they’ll be more likely to treat your assessment with sympathy. But this is not always the case. Before carrying out an assessment, the EDD reviews your worker classification status and your business transactions. Of course you want to be polity with your EDD representative, but also be cautious and do not over-share information during your discussions. Remember, they are there to assess you with a penalty; not be your confidant.
- The “no one fights city hall” stance. It’s widely known stance, and the EDD is expecting you to follow suit. However not fighting for yourself will result in a win for the EDD., So many tax payers give up the opportunity to ensure that a proper assessment is done or even explore the benefit of a settlement option. It is very productive to challenge the EDD; this is a fact most people don’t know. Challenging the EDD can often lead to a reduction in the assessment and a total elimination of certain EDD penalties. Resolving this issue prematurely gives the IRS an opportunity to do an assessment, which is 10 times larger than the one carried out by the EDD. Always seek professional advice within the 30-day time limit before deciding not to challenge the EDD.
- Giving up your negotiation power because you received an EDD assessment. Many taxpayers believe once the EDD issues an assessment, the power to reach for a settlement is lost. This is actually not true. The EDD has a small unit, commonly known as the Settlement Office, which takes care of settlements. An experience tax attorney will tell you that a settlement is a better option than the expenses that would be incurred during a formal hearing. A good settlement will go a long way in cancelling out the stress of a formal hearing.
Ways to Fight the EDD
The first step in fighting the EDD is file an early petition with the California Unemployment Insurance Appeals Board (CUIAB). Once the final Notice of Assessment has been issued, you will receive notification to file a petition within 30 days. You can also send a letter to the CUIAB with an attachment of the Notice of Assessment, requesting a hearing. The letter should contain detailed reasons as to why you disagree with the assessment carried out by the EDD.
If using professional help from a tax attorney or EDD expert, they will likely file a more formal petition centered on the legal position and defense of the client. Even if you do not use professional help, your petition to the Board must be filed in a timely manner. Late filing of petitions will be disastrous for your case and will give the EDD an advantage. This could result in a closure of the assessment, and a collection of the assessed deficiency plus accrued interest. This will affect your business and lead to steep financial losses for you, as well as open you up to liens and levies. Additionally, the IRS may enter the situation and offer an additional assessment that is higher than the one levied by the EDD. It is also essential for the prevention of liens and levies or seizures. Also, note that even though the petition is filed early, there is no reduction or stoppage of interest accrued from unpaid proposed assessment.
There are two options available after filing a petition: you can choose to settle the matter or have a professional assess the issue based on the evidence provided. A prehearing statement is considered advantageous after filing a petition. The Settlement Office is an option for consideration, in the event when the business owner believes the audit can be solved without the expense incurred from going through a formal hearing by an administrative law judge (ALJ). If left unsatisfied with the settlement decisions and the settlement offered by the EDD, you should request a full hearing by an administrative law judge.
You may also consider filing the petition and paying the assessment. This tactic will ensure that your case will become a refund proceeding. Fully paying your assessment will allow you to make your case an automatic claim for a refund. In California, it is your right to have your refund matter heard in the Superior Court before going through any other court. If you avoid following this path, it will render your refund suit inconclusive and will be dismissed by the court. For it to be heard by the Superior Court, it must pass through the Administrative Law Judge before the Superior Court judges on the matter.
Contact our EDD Appeals Lawyer – Serving Orange County and San Diego County
There are numerous options available of you receive an EDD assessment that did not have a favorable result. Do not simply give up and think you do not have choices. Consult a San Diego or Orange County EDD appeals lawyer or tax attorney who can help you determine the best route to ensure your appeal is heard.