California’s Employment Development Department (EDD) can audit your company when one of your independent contractors tries to obtain unemployment benefits. This process can be costly and taxing, but you can better survive it by not making certain errors. Learn the common mistakes to avoid during an EDD audit so you can make better decisions for your business.
Ignoring the Seriousness of an Audit
One mistake to avoid during this process is ignoring the seriousness of the situation. It will not “just go away.” The department is performing this audit because they want to see if you misclassified your contractors and will want to investigate the recent years of your business. It may cost you thousands of dollars or even more if they find that you have committed violations.
Not Hiring a Lawyer
Trying to do this without an EDD audit lawyer is another common mistake to avoid. You are likely not an expert in the audit process, so don’t try to go into one without the guidance of someone with the right expertise.
A lawyer can advise you on what you should and shouldn’t do during the audit. This advice can include not giving documents to the EDD that it does not have the right to ask for. The counsel of a lawyer will help prevent you from making errors that will make the process even worse for you.
Paying the EDD Assessment Without Challenging It
Part of you may consider ending the audit process by paying the EDD assessment without challenging it. This strategy is also a mistake. A lawyer can help you file the appeal and develop a settlement with the EDD.
That settlement may help you develop payment terms you are comfortable with and reduce the amount that you must pay. You will be glad you saved your company considerable costs by seeking the assistance of an attorney.
Contact Pershing Square Law Firm today if you need the representation of an experienced payroll tax audit defense lawyer. We have a strong record of lowering the assessments of our clients and are fully qualified to manage your audits with EDD auditors.