When the Employment Development Department (EDD) performs tax audits, they usually lead to an assessment of unpaid payroll taxes, income tax, and penalties. These assessments cover a period of multiple years and can range from a few thousand to hundreds of thousands of dollars, which the owners of the business are personally liable to pay. Once the EDD issues the assessment, you have a small window of time to challenge it before it becomes permanent.
That makes it critical to hire an EDD tax lawyer at Pershing Square Law Firm. Being experienced payroll tax audit defense lawyers, our firm has extensive experience managing the risks of such audits. We can also help you negotiate the amounts and the terms of payment with the EDD so that you can make the process as stress-free as possible and stay focused on operating your business.
Not only do we have extensive expertise involving the process, but we have an impressive rate of positive results for our clients. Over the years, we have successfully and significantly reduced the assessments to 100% of our clients who pursued a timely appeal. It is advisable to have an experienced attorney manage the audit on your company’s behalf. But our services can help you beyond the audit itself. We can advise you on how to prevent your business from experiencing such costly audits in the future. Make sure you get the right representation by hiring one of our EDD tax lawyers today.
“For a nominal fee, which was much better than I expected, he reduced my payroll tax assessment and saved me $53,000. They have a set fee so I didn’t have to worry about attorney’s fees building up.”
“They are an exceptional law firm. When all else failed I found support.”
“They told me they’d take my case and hopefully get a good result, and boy did they ever … if I could give them 10 stars I would.”
As experienced payroll tax audit defense lawyers, we want to educate clients on what EDD audits entail. The EDD is in charge of collecting payroll taxes from all California businesses, making it one of the largest tax collection agencies in the country. One of the common pitfalls businesses encounter is when they choose to work with individuals as contractors rather than employees.
Since businesses do not pay payroll taxes for contractors, the EDD may launch an audit if they believe you may have misclassified them. The audits can cover all the individuals you worked with in recent years (including yourself), and can materialize into significant liabilities that you may be personally liable to pay. There are strict deadlines to challenging tax assessments, and if you do not act quickly you would likely lose your right to appeal and would have to repay the full assessment.
EDD Payroll Audits are usually triggered when an individuals who worked for you as a contractor files for unemployment or disability benefits.
You have a strict deadline to appeal an assessment or fully pay it. Failure to do either one could lead to penalties and/or loss of right to appeal.
Business owners may be personally liable to pay for tax assessments against their business.
Most EDD audits are caused by businesses who pay workers off the payroll. Most commonly, this is caused when you pay someone as a contractor.
Audits may occur when business owners fail to pay themselves wages or pay themselves below their fair market value.
Failure to issue 1099s to individuals who work as contractors may leave you responsible to pay their personal income tax following a payroll audit.
Out-of-state employers may be audited if they work with individuals who provide services in California.
All California workers are presumed to be employees. The law places the burden of proving otherwise on the employer.
We have a 100% success rate in reducing assessment to all clients who have filed timely appeals.
No hourly rates or billable hours. You pay a single flat fee.
All information provided on this website is for informational purposes only and does not constitute legal advice. It is intended to offer general guidance and resources.
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