Key Takeaways
- So let’s say you have an audit and the audit doesn’t go well and you file an appeal.
- Often the EDD settlement officer is allowed to consider the risk of litigation, so they’re trying to get cases out of the appeals process.
- Usually if there’s a favorable resolution, they’re willing to settle.
So let’s say you have an audit and the audit doesn’t go well and you file an appeal. Before you get into the appeals process, you have the option of going to EDD settlement and so what that takes is your attorney is going to draft a written settlement request and they’re going to state their case and why they believe that the EDD should settle this issue. So you want to basically do the best job that you can and put together the biggest package you can to get to the EDD because the EDD settlement officer is going to take the audit report and they’re going to take your settlement offer and they’re going to look at it and they’re going to compare the two and then they’ll probably come back to you with questions. Often the EDD settlement officer is allowed to consider the risk of litigation, so they’re trying to get cases out of the appeals process. Usually if there’s a favorable resolution, they’re willing to settle. In most cases with the EDD on payroll tax liabilities, particularly with independent worker classification, there will be an omission and a requirement that any errors that were uncovered during the audit can be corrected for the future so just know in advance that might be a condition to the settlement. Settlement is not going to eliminate your liability entitlement entirely. Particularly in the context of illegal settlement, both sides don’t get exactly what they want so if you understand that and keep that framework in mind during the process, settlement can be a very good tool at the EDD level in order to dismiss cases.
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