What to Expect: Employment Development Department Audit
Whether you’re a new business or a longstanding one, you might have received a notice of audit from the Employment Development Department. If this is the case, then you likely want to know why you were chosen for an audit and what to do next.
What is an Employment Development Department Audit?
This audit is conducted specifically on payroll taxes for California businesses to make sure that businesses comply with the standing rules and regulations on withdrawing taxes and employment benefits, including coverage and wages. If you’ve been chosen for audit, you might not have anything to worry about, but the process of going through an Employment Development Department Audit can be trying for anyone. That’s why it’s crucial to have a tax professional at your side, and you need someone who specializes in Employment Development Department audits.
What Should I Expect in an Employment Development Department Audit?
First and foremost, these kinds of audits differ from other kinds of audits. The first step in an Employment Development Department audit actually beings before the audit. You’ll have an entrance exam with your Employment Development Department audit first.
During this interview, you’ll be told exactly why you have been chosen for an audit, and you’ll find out more about the Employment Development Department audit process. If you have any questions, this is when you’ll ask them, and this is also the best time to make sure you’ve got a tax professional in your corner.
After the entrance exam, the actual audit will commence with a review of records. Your auditor will request records during the entrance exam, and they can even ask for records after you’ve furnished records. Be prepared for anything, and always furnish them with as many records as possible.
Once your audit is complete and all documentation has been provided to your auditor, then your auditor will speak with you after all documentation has been processed. During this meeting, you need to have a tax professional with you.
Do I Need a Tax Professional for My Employment Development Department Audit?
Yes, you need to have a tax professional to help at every step of the way to ensure that you know your rights and navigate the process in the best way possible. During your audit, a number of things could be uncovered: underpayment, overpayment, no charge, or that you need to reclassify you contract workers as employees. You do have the right to request an appeal if you aren’t satisfied with the results of your audit, and if you appeal, you can have a reassessment done. This is a time when it’s crucial to have a tax representative to help. At the end of the day, an Employment Development Department Audit can be a trying process, but our team can help ensure the best results possible from your audit.