rs-california-payroll-tax Archives - Page 4 of 6

Why Should I Hire Brotman Law to Defend Me in My Payroll Tax Audit?

April 23, 2026July 14, 2020 by Brotman Law

Key Takeaways

If there’s one thing that we do really well in this firm it’s handling payroll tax audits.
We have a lot of experience in dealing with the EDD through a variety of their district offices.
We’ve been to district offices all up and down California.

If there’s one thing that we do really well in this firm it’s handling payroll tax audits. We have a lot of experience in dealing with the EDD through a variety of their district offices. We’ve been to district offices all up and down California. You can handle these issues in front of them all the way from sitting down here in San Diego up into Northern California and we do a lot of these types of cases. Over the course of doing this, we’ve really developed a body of experience. Our body of experience is not only at the audit level, it’s with EDD settlement and it’s with EDD appeals. So the nice thing about our firm is all of our team has a really good understanding for how things play out at different levels in the process. When we have an EDD audit client come in, we’re not only pre-auditing them to present information to the auditor, but we’re constantly thinking about how things are going to play out in front of an administrative law judge in front of the higher levels and we’re really working to build a case. We’re really good at figuring out what our client’s liability is at the beginning of this and then mitigating that as much as possible. We’ve got a very good success rate with the EDD particularly in cases where we have some frustration or some difficult issues and we’re able to resolve them. Now the EDD is a difficult organization to work with. You take the San Diego office for example, you’ve got a group of Auditors in the San Diego office that’s really good and you got a group that’s not so good and we kind of know who the good ones are and the bad ones are because we have that familiarity with them. The auditors know that our level of preparation and our level of organization and in moving through the audit is really unmatched. I mean we really focus in and get these audits to a point where we’re delivering the best results for our client. So I think our process is great. I would encourage you sit down with myself, sit down with one of our senior attorneys, let us walk you through your particular EDD audit situation and let’s at least develop a plan. If you decide to take that plan and go somewhere else or not retain us, no problem. But at least you’ll have a good understanding of what your risk is. You understand how the EDD is going to look at you from a penalty perspective, how they’re going to look at your contractors and then you can make your own decision on how you want to proceed and what the best course of action is.

What Happens After the Audit? What Happens If I Disagree With the Result?

April 23, 2026July 13, 2020 by Brotman Law

Key Takeaways

Topic: What Happens After the Audit? What Happens If I Disagree With the Result?
There are a couple possible outcomes.
Number one is that the auditor’s report is sufficient and that you agree with it.

There are a couple possible outcomes. Number one is that the auditor’s report is sufficient and that you agree with it. If you agree with it, there will be a short exit conference between you, the auditor and the manager so the auditor can explain what they did in the report. If you don’t agree with the audit then this conference happens anyway but at least that will give you the opportunity to express your disagreements in front of the manager and have the auditor potentially make changes. Now the problem with this is is the auditor at this point has usually already run the audit report by the manager and anticipated any disagreements that you might have with it so the manager is less likely to stand up for you than you would think but there are opportunities there to present any additional documentation or any other fact-finding before the close of the audit. If you’re not successful with resolving things with the manager, then the auditor will issue you a bill. They will turn in the audit and a bill will be generated about two to three months later and then when you receive that bill, you can file a petition for redetermination. Upon filing your petition for redetermination, you will proceed to a 10-day conference. We will have the opportunity to speak with the head of the audit unit for that particular.

California Payroll Tax Audits and Payments to Officers

April 23, 2026January 4, 2018 by Brotman Law

Key Takeaways

Topic: California Payroll Tax Audits and Payments to Officers
Let’s talk about that in a little bit of detail.
In going through the business’s records, the auditor is going to look for things that are openly flagrant.

In addition to payments to employees either as casual labor or as reimbursements, the auditor is also going to look at any payments to officers or any personal expenses that are being written out of the business, and in an effort to classify personal expenses as taxable wages. Let’s talk about that in a little bit of detail.

California Payroll Tax Audits and Employee Reimbursements

April 23, 2026January 4, 2018 by Brotman Law

Key Takeaways

Topic: California Payroll Tax Audits and Employee Reimbursements
One of the biggest problems that we come across in payroll audits is employee reimbursements and independent contractor reimbursements.
A lot of the times what will happen is an employee will get paid a normal paycheck and then they will spend their own money outside the context of the business to buy materials,….

One of the biggest problems that we come across in payroll audits is employee reimbursements and independent contractor reimbursements. A lot of the times what will happen is an employee will get paid a normal paycheck and then they will spend their own money outside the context of the business to buy materials, to buy supplies, go post office do whatever. The business will write the employee a check out of their operating account and not run it through payroll.

EDD Independent Contractor Test

April 23, 2026January 3, 2018 by Brotman Law

Key Takeaways

Topic: EDD Independent Contractor Test
After verifying payroll and payroll tax withholdings, the EDD will next go through and verify all the workers that the business issued 1099s to.
This is what is known as the EDD Independent Contractor Test.

After verifying payroll and payroll tax withholdings, the EDD will next go through and verify all the workers that the business issued 1099s to. This is what is known as the EDD Independent Contractor Test. First, the EDD auditor will go through each 1099 worker in detail, one by one. Even 1099’s that were issued to businesses, landlords and others that are clearly not subject to payroll tax withholdings, you can pretty much count on the EDD auditor going through each one and verifying who was issued a 1099.

EDD Audit Payroll Tax Verification Test

April 23, 2026January 3, 2018 by Brotman Law

Key Takeaways

Topic: EDD Audit Payroll Tax Verification Test
In addition to the payroll verification test, the EDD will also look at personal income tax withholdings and make sure that the amounts listed match what the state has on file a….
Just to go back and clarify, the EDD audit is going looking at the wages and the income that the people earned.

In addition to the payroll verification test, the EDD will also look at personal income tax withholdings and make sure that the amounts listed match what the state has on file as well. Just to go back and clarify, the EDD audit is going looking at the wages and the income that the people earned. The EDD auditor is going through the payroll journal to make sure that the total wages is going to match. Now, this article discusses going through and doing a personal income tax withholding test.

Independent Contractor Audit – Initial Interview Purpose

April 23, 2026January 3, 2018 by Brotman Law

In our last article, we examined the questions that are asked in an independent contractor audit. In this article, we would like to examine the purpose behind those questions in a little more depth.

Key Takeaways

In our last article, we examined the questions that are asked in an independent contractor audit. In this article, we would like to examine the purpose behind those questions in a little more depth.
The auditor’s first goal in an independent contractor audit is establishing a system and a pattern of routine for the business’s operations.
The auditor here is establishing a pattern of who the business's workers are that function as employees. The reason the auditor doing that obviously is to compare the employees to any independent contractors that the business may have.

EDD Independent Contractor Audit – Initial Compliance Interview

April 23, 2026January 3, 2018 by Brotman Law

Key Takeaways

Topic: EDD Independent Contractor Audit – Initial Compliance Interview
The first thing that happens in an EDD independent contractor audit is the initial compliance interview.
The initial compliance interview serves a couple of different purposes.

The first thing that happens in an EDD independent contractor audit is the initial compliance interview. The initial compliance interview serves a couple of different purposes. Number one, it is to get background information on the client. Number two, it is to get answers in place for different questions in case there is any problems or factual disputes that come up later. For example, one of the questions they ask you is “How many locations do you have?”. That way if they later get information on a location that you did not disclose, you could potentially dig yourself into trouble.

California Payroll Tax Audits and the General Ledger

April 23, 2026January 3, 2018 by Brotman Law

Key Takeaways

Topic: California Payroll Tax Audits and the General Ledger
When the auditor goes through the general ledger, they are going to be looking for a couple of different things.
Number one, is they’re going to be looking for payments to people.

During a payroll tax audit, the EDD is next going to go through the business’s general ledger in detail, the general ledger is important because the general ledger contains a record of all the payments the business made during the audit period in question. When the auditor goes through the general ledger, they are going to be looking for a couple of different things. Number one, is they’re going to be looking for payments to people. The auditor is looking for payments to people who may or may not have been a 1099 and they are going to be looking for payments to the business’s employees and toward 1099 contractors that were not listed on the W2 or the 1099 for whatever reason.

What to Do if the EDD Takes Your Money

April 23, 2026January 25, 2017 by Brotman Law

Key Takeaways

The EDD is within its legal rights to withhold money from a variety of programs and tax refunds if you do not pay up.
Any contact by the EDD or Central Collection Division will be made by phone or postal mail.
The EDD much prefers to work out a solution to the problem without resorting to enforced collection methods.

The California Employment Development Department can legally withhold money owed to you by the state for repayment of debt. In other words, either through error or willful action, you owe a monetary debt to the State of California.

The EDD is within its legal rights to withhold money from a variety of programs and tax refunds if you do not pay up. It works with the California Franchise Tax Board, the State Lottery, and the State Controller to collect the outstanding debt.