The EDD Notice of Assessment and the 30-Day Petition for Reassessment

The Notice of Assessment from the Employment Development Department (EDD) is the bill that closes a payroll tax audit, and it gives you 30 days from the date it is served to file a petition for reassessment with the California Unemployment Insurance Appeals Board (CUIAB). The notice lists the quarters, the four payroll taxes, the penalties and interest, and the total, and it explains the petition right. File the petition and nothing is collected while the case is pending, although interest keeps running; let the 30 days pass and the assessment is final and collectible. If the audit itself is still open, start with our EDD audit attorney page.

What the Notice of Assessment is and why you received it

A Notice of Assessment is the EDD’s formal demand for the contributions, withholdings, penalties and interest an auditor concluded you owe, and it issues when the audit ends without agreement, or when returns were never filed and the EDD estimated the wages. In a worker classification case it covers each quarter in the audit period, usually the last twelve, and for each quarter it shows the unemployment insurance, employment training tax, state disability insurance and personal income tax withholding computed on the payments the auditor treated as wages. Penalties are listed by section, most often the 15 percent negligence penalty under section 1127 of the Unemployment Insurance Code (UIC), and interest is computed to a date on the notice under section 1129, running from the month after each quarter closed. The notice is served by mail to the address the EDD has on file, so one sent to an old address or a former bookkeeper still starts the clock.

The 30-day deadline and what happens if nothing is done

The petition is due 30 days after the notice is served, an administrative law judge can grant 30 more for good cause, and a notice with no petition becomes final at the end of that period under section 1222. Final means the EDD adds a 15 percent penalty under section 1135 once the assessment is delinquent, its collection unit can file a Notice of State Tax Lien and levy your bank and your customers, and if the entity cannot pay, section 1735 lets it assess the officers and owners who ran the business personally. There is no appeal from a final assessment; the way back in is to pay it and file a claim for refund.

How engagements work

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers the work — agency contact, deadlines, document responses, strategy — until the matter resolves. Shorter, well-defined projects are often a one-time flat fee instead, and some matters genuinely fit hourly billing better. We will tell you which you are looking at on the first call, before you commit to anything. If you want the details first, see how we price our work.

What is the date on your Notice of Assessment, and what does it cover?

Tell us where things stand. We respond to new inquiries within one business day.

What to do in the first 30 days

The first 30 days are for getting a petition on file that preserves every argument, and for using the rest of the month to find the errors in the notice. In order:

Calendar the deadline from the date on the notice, not the day you opened it.
Write the petition: identify the notice, say that you contest the assessment, and list the grounds, such as the workers were independent contractors, the wage figures are wrong, the penalty does not apply, or the periods fall outside section 1132.
Leave out the evidence, the story of the audit and anything that reads as an admission; those belong at the hearing.
Send it the way the notice says, keep proof of the mailing date, and confirm the CUIAB assigned a case number.
Request the auditor’s full report and working papers.
Decide whether to pay part of the assessment now; payment stops interest on that part and does not waive the petition.

Your options after a Notice of Assessment

Every Notice of Assessment ends one of five ways, and which one fits depends on the classification facts and the size of the number.

Petition and go to hearing. An administrative law judge at the CUIAB hears the case fresh, with testimony and exhibits, and issues a written decision that can affirm, reduce or cancel the assessment.
Petition and settle. With a petition pending you can submit a written offer to the EDD’s settlements office under section 1236; the EDD weighs its risk of losing and the cost of the hearing, and fraud cases are generally not eligible.
Petition and adjust the personal income tax. The withholding assessed for workers who reported the income on their own California returns can be removed on their certification, which often takes the largest line off the notice without a hearing.
Appeal further. Either side can appeal the judge’s decision to the Appeals Board within 30 days under section 1224, and after that the remaining route is a refund action in superior court, which requires paying first.
Pay. For a small, accurate assessment, paying and putting the workers on payroll costs less than the alternatives.

What Brotman Law does with a Notice of Assessment

For a Notice of Assessment our work in the first 30 days is to file a petition that keeps every argument alive, take apart the auditor’s numbers, and put the case on the path, hearing or settlement, that ends it at the lowest cost. The first step is the power of attorney, and the petition goes out early and short. Then we get the audit report and rebuild the assessment from your records: the wage schedule for each worker, the quarters, the test applied, and the arithmetic, which is wrong more often than you would expect. We collect the worker certifications and request the personal income tax adjustment, which does not wait for the hearing. We build the classification file for the workers you can win, meaning the prong B and prong C evidence or the Borello factors for an exempt relationship, and concede the ones you cannot. Then we open settlement talks with a number the EDD’s hearing risk supports, and if the EDD will not move, we try the case with the workers’ own testimony. Our CUIAB hearing page covers that day.

Do you need a lawyer for a Notice of Assessment?

Yes, when the notice covers more than one year, more than a few workers, or a personal income tax line that is most of the total, and when you are an officer or owner the EDD could assess under section 1735. The petition is easy to file and hard to win, because the hearing is a trial with the burden on you.

A sole proprietor with one worker, one year and a small assessment can usually file the petition, request the income tax adjustment and settle or pay with an accountant’s help. We would rather say so on the free 15-minute call than take a fee for a hearing you do not need.

How the monthly flat fee works for a Notice of Assessment

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers agency contact, deadlines, document responses and strategy until the matter resolves. It does not include the tax, interest, any settlement amount, or the defense of a separate personal assessment under section 1735, which is its own engagement. The engagement ends when the assessment is settled, paid, or decided by the administrative law judge or the Appeals Board, and the monthly fee stops with it.

Documents to gather

Seven items answer nearly every question a Notice of Assessment raises.

The Notice of Assessment, every page, with the envelope.
The auditor’s report and wage schedules, and the proposed assessment if you received one.
Forms 1099 and payment records for every worker in the assessment, for every quarter covered.
Your quarterly payroll returns for the same period.
Contracts, invoices and proof of an independent business for each worker you intend to contest.
Any earlier EDD correspondence, including the audit inquiry letter.
The entity’s formation documents and a list of officers and owners, for the section 1735 analysis.

What does a petition for reassessment have to say?

A petition has to be in writing, identify the Notice of Assessment, and state the specific grounds on which you contest it, and a signed letter that does those three things is enough. The grounds you list set the issues the judge hears, so every argument you may want later belongs in it. It should not contain your evidence, your account of the audit, or admissions about how the workers were paid; those belong at the hearing.

Do I have to pay the EDD assessment while my petition is pending?

No. A timely petition holds collection until the decision is final, and the EDD does not file a lien or levy for an amount under petition. Interest keeps accruing under section 1129 the whole time, so where the facts are weak it can make sense to pay, since a payment is not an admission and the petition then continues as a petition for refund.

Can the deadline to petition an EDD Notice of Assessment be extended?

Yes, for good cause: section 1222 lets an administrative law judge grant an additional 30 days, on a written request that explains why the petition could not be filed in the first 30. Good cause means an obstacle, such as a hospitalization or a notice that went to a wrong address, rather than a busy month. Ask inside the original 30 days if you can, and file the petition itself as soon as the reason has passed.

How long does an EDD petition for reassessment take?

From petition to hearing is usually six months to a year, and the judge’s written decision follows the hearing. The CUIAB sends your petition to the EDD for a written answer, then sets the hearing with at least 20 days’ notice under section 1223. A settlement usually closes the case sooner, while an appeal to the Appeals Board adds months and a superior court refund action longer still.

Can I settle with the EDD after filing a petition?

Yes. Section 1236 of the Unemployment Insurance Code lets the EDD settle a disputed assessment once a petition or a claim for refund is pending, and its settlements office evaluates a written offer on the risk of losing at hearing and the cost of getting there. Inability to pay is not a basis by itself, so the offer rests on the weaknesses in the auditor’s findings. Every agreement needs an administrative law judge’s approval, and if the workers’ status is at issue you agree to report them as employees going forward.

What happens after the CUIAB hearing?

The judge issues a written decision, and either side can appeal it to the Appeals Board within 30 days under section 1224, on the hearing record and with no new evidence. After the Appeals Board, the only path is a refund action in superior court under section 1241, and it requires paying first: you pay, file a claim for refund under section 1178, take the denial back through the judge and the board, and sue within 90 days of the board’s decision. That is slow and ties up the money, so most cases end at the hearing or in settlement.

The other pages in the sequence:

Talk to us

Brotman Law is in San Diego and was founded in 2013. We represent clients anywhere in the country before the EDD, and we have resolved 2,200+ matters along the way. The first step is a free 15-minute call with our intake team. From there, the next step is a strategy session with the attorney; if it has no value to you, it is refunded. Book a free 15-minute call.

Sam Brotman, JD, LLM, MBA. Last reviewed September 2026.