EDD Defense Strategy

At Brotman Law, we focus on providing as much as we can for our clients. That’s why we created Brotman University – your one stop shop for comprehensive tax law resources.

• Filter by content type Blog
• Videos
• Case Studies
• Guides
• Testimonials

Tax Strategy & Optimization

• Business Tax Optimization
• Individual Tax Optimization
• Residency & Multi-State Tax Issues
• Exit Planning and Other Corporate Transactions
• Real Estate and Investment Portfolio Optimization

Tax Defense

• Criminal Tax Defense
• IRS Audits
• California Income Tax (FTB)
• California Sales, Use, and Excise Tax (CDTFA)
• California Payroll Tax (EDD)
• IRS Tax Debt Resolution
• California Tax Debt Resolution
• Other State Tax Representation

Employee Retention Tax Credit

• Employee Retention Tax CreditFilings
• Employee Retention Tax CreditAudits
• Employee Retention Tax CreditAppeals
• Employee Retention Tax CreditLitigation

Other Complex Tax Issues

• International Tax Controversy and Compliance
• Multi-State Tax Compliance and Voluntary Disclosures
• Divorce/Legal Separation Tax Issues
• Cryptocurrency Tax Issues
• Cannabis Tax Issues
• Tax Promoter/Tax Shelter Issues
• Complex Tax Preparation
• Other Insights

The Employment Development Department (EDD)

The Employment Development Department (EDD) The Employment Development Department, or EDD, is one of the largest California state departments and is responsible for administering the payroll tax regulations for California businesses and individuals Payroll taxes administered by the Employment Development Department (EDD) include the following: Employment Training Tax (ETT) Unemployment Insurance (UI) Personal Income Tax (PIT) ... <a title="The Employment Development Department (EDD)" class="read-more" href="https://sambrotman.com/blog/employment-development-department-edd/" aria-label="Read more about The Employment Development Department (EDD)">Read more</a>

How to Apply Payroll Taxes for Multistate Employees

Do you have employees in states outside of California? We can help you fulfill the payroll tax requirements for multistate commerce.

Is Labor Taxable in California?

The labor that you are using in your business may be taxable. How do you know? Here some pointers from an experienced tax attorney.

What Is an EDD Offer In Compromise?

Did you know that the EDD can receive applications for Offers in Compromise? This may enable a tax debtor to eliminate an employment tax liability at less than full value.

How to Request an EDD Installment Agreement

Has your tax debt become an endless nightmare? Here are the payment plans available with the EDD to help you wake up and shake it off.

How to Appeal California Payroll Taxes

Are you late on your payroll taxes? Assessments become delinquent and can be subject to a penalty of 10 percent. Before this happens, know what to do.

What Should You Do If the EDD Takes Your Money

Did you receive a notice from the EDD? Do not ignore it. Work with the Tax Rep and an attorney to determine if you truly owe the state repayment and if so, how to pay it back.

What Are EDD Liens and Levies?

Paying your payroll taxes correctly and on time should prevent you from receiving a notice of lien or levy from the EDD.

Blog

The Ultimate Guide to the Employment Development Department (EDD) Collections

Are you an employer in need of information regarding your state employment-tax obligations? California’s EDD is one option, getting legal assistance is another.

How Do I Prepare For A 1099 Independent Contractor Audit?

In this article, we are going to dive through the nuts and bolts of how to really prepare for the audit when it comes to the subject of independent contractors and potential misclassification issues.

What Are The California Payroll Tax Penalties If I Do Not Pay?

You can run but you cannot hide from payroll taxes. Failure to pay can result in some steep penalties. How much? Keep reading.

California Payroll Audit Strategies For The Independent Contractor

Learn California payroll tax audit strategies for the independent contractor based on a few tips and tricks that we have learned over the years based on our experience in EDD audits.

What Happens During A California Independent Contractor Audit?

If you're facing a California independent contractor audit, you'll want to know what happens ahead of time so you can enter the audit prepared.

Federal (IRS) Payroll Tax

Payroll taxes, whether under the IRS or the State of California, are treated differently by the different agencies because of a variety of different factors. If you have employees, payroll taxes are a fact of life.

Using The EDD Lead System In A California Payroll Tax Audit

The first call on the audit is to figure out exactly what the auditor knows about the case. How much third-party information have they gathered and what access to that information do they have.

EDD Audit Process: Triggers, Penalties, Letters &#038; More

What is the EDD audit process like? Learn about California EDD audit penalties, what triggers an EDD audit, what an EDD auditor asks, how long it takes (& more)

RESULTS PER PAGE

• 10
• 25
• 50

The Audit Process Step by Step

Here's what happens from the moment you receive an audit notice to resolution:

1. Notice received — The IRS sends a letter explaining what they're examining and what documentation they need
2. Power of Attorney filed — We sign Form 2848, which means the IRS talks to us, not you
3. Document review — We review every document before anything goes to the IRS. We provide exactly what's needed — nothing more
4. Examination — The IRS reviews your records. For office and field audits, we attend all meetings in your place
5. Proposed adjustments — If the IRS wants to make changes, they issue a written proposal. We review it line by line
6. Negotiation or appeal — We challenge anything we disagree with. If we can't resolve it at the exam level, we take it to appeals
7. Resolution — Case closed. We make sure you understand the outcome and what it means going forward

Why You Need Professional Representation

Here's the reality: anything you say to the IRS can be used against you. Even an innocent statement can be misinterpreted, taken out of context, or used to expand the scope of your audit.

Your CPA probably filed your return. That's great. But filing a return and defending one are two completely different skills. You wouldn't send your dentist to perform heart surgery — the same logic applies.

A qualified tax attorney knows IRS procedures inside and out, understands the legal standards the IRS must meet, and knows exactly how to position your case for the best possible outcome.

Appeals & Next Steps

If you disagree with the audit results, you have the right to appeal. The IRS Office of Appeals is independent from the examination division, and they settle the majority of cases they hear.

We've won over 100 appeals by building cases that are thoroughly documented and legally sound. The key is presenting a clear, well-organized argument that makes it easier for the appeals officer to rule in your favor.

If appeals doesn't resolve it, the next step is Tax Court. We're prepared for that too, but in our experience, most cases settle well before they get to trial.

How to Prevent Future Audits

Once your audit is resolved, the last thing you want is another one. Here's what we recommend to minimize your risk:

• Keep meticulous records — especially for deductions and business expenses
• Report all income — even if you didn't receive a 1099
• File on time, every time
• Use actual calculated figures rather than round numbers — while not a major audit trigger on its own, it's a best practice that signals accuracy in your records
• Work with a qualified tax professional who understands your situation
• Consider a proactive tax strategy engagement to optimize your structure and reduce risk