EDD LAWYER IN SAN DIEGO
Dallo Law Group is where you can find the best EDD lawyer in San Diego. Our professionals are aggressive, have up-to-date tax knowledge, and are both efficient and reasonable in the navigation processes to get you solutions to any matters involving the workplace. Whether you are an employer or employee, we have a wide variety of practice areas related to employment law, tax, and employment litigation.
WHAT IS THE EMPLOYMENT DEVELOPMENT DEPARTMENT (EDD)?
The Employment Development Department (EDD) was formed in 1935 and is one of the largest state departments which serves millions of residents throughout California. The variety of services this agency provides includes:
Administration of the Unemployment Insurance and State Disability Insurance programs.
Audits and collects payroll taxes and maintains employment records for millions of California workers.
Connects job seekers with employers and administers federally funded workforce development programs.
Gathers, analyzes, and publishes labor market information.
WHAT IS AN EDD AUDIT?
An EDD audit checks to see if you classified workers correctly and finds out whether or not you paid the right amount of employment taxes. In short, the EDD conducts audits to ensure that businesses pay payroll taxes and employees receive their entitled benefit coverage. Many EDD payroll tax problems begin when a worker who is classified by an employer as an independent contract files for unemployment insurance. Any type of business in California can be chosen for a payroll tax audit. Thus, it is imperative that you properly follow your responsibilities with correctly classifying your workers, and withholding and remitting employment taxes for contract employees.
During this audit, the agency will uncover if the employer was controlling the worker’s manner, mode, method and means of performing the details of the work. The California Supreme Court states that strong evidence in support of an employment relationship is the right to discharge at will, without cause. Furthermore, in many cases, if it can be proven that the worker had his own business, the EDD will typically determine that individual is not an employee. However, for audits of tax periods beyond January 1, 2020, the EDD will follow the “ABC test” that California has codified into law. This makes it much more likely that the worker is an employee unless they fall under a specific exception.
After the EDD audit, the findings may show that you properly classified workers and paid them the amount that you reported. On the other hand and due to the evidence uncovered, you may be subjected to additional back taxes that you owe including penalties and interest. The audit covers the 12 most recently completed calendar quarters, making up a total of three years. However, if you did not file any returns, the audit might cover a longer period of time.
WHAT IF YOU DISAGREE WITH THE AUDIT?
If you disagree with the audit’s findings you can file a petition for redetermination and have your case heard by an Administrative Law Judge (ALJ). During this hearing, the judge will review the evidence to determine the employer was controlling the worker’s manner, mode, method and means of performing the details of the work or if they met the ABC test. The hearing is usually in person but can be done remotely or by video conference. This is the taxpayer’s main opportunity to protest the audit without paying the tax and seeking a refund.
HOW TO PREPARE FOR THE EDD HEARING
In preparation for the hearing, you should gather your evidence and be prepared to give testimony. This is the taxpayer’s chance to provide additional evidence and cross-examine the EDD auditor. The ALJ will ask questions, review your documents, and make a decision on your appeal, so you want to do all you can to win your case. If you do not agree with the ALJ’s decision you can appeal the decision to the California Unemployment Insurance Appeals Board, but that review will be limited in scope.
Evidence you should bring along with you will be dependent on how you wish to dispute your case. Particularly, if your dispute is centered on the proper classification of your worker, you should be familiar with how California comes to this determination and the exceptions under the ABC test.
Some simple tips to bear in mind include:
be on time
be thorough in your preparation
answer the questions posed to you in a professional manner
be prepared to ask the auditor questions
gather your thoughts for an effective closing statement
HOW OUR SAN DIEGO EDD ATTORNEYS CAN HELP
Dallo Law Group stays at the forefront of employment tax law and litigation and that is why we are consistently ranked among the top San Diego EDD tax attorneys. Our team includes both CPAs and tax lawyers who have diverse backgrounds. Our biggest priority is to provide our clients with the best possible results for their situation.
An EDD audit is an intricate procedure which can be draining and stressful. Dallo Law Group will work with you to develop the appropriate witnesses and documentary evidence to help your payroll tax dispute go in your favor. It is important to note that if an employer can not pay the California employment taxes it owes, the EDD may hold the officers and stockholders who willfully fail to pay California payroll taxes personally responsible. No one should be left in such an unfavorable situation.
No matter how complicated, our professionals can represent you in an EDD audit from beginning to end and with the individualized attention that you and your case deserve. Whether you are in the midst of an EDD audit or down to the EDD hearing, we are here to help. Dallo Law Group provides a free consultation and case evaluation, so contact our firm today to get started.