ASK THE EDD ATTORNEY – THE EDD SETTLEMENT PROCESS MAY TAKE A LONG TIME
By Robert S. Schriebman
2018
Introduction
EDD settlement resolution seems to be taking longer than that it has in the past. So, I decided to give those nice folks at the Settlement Office a call to find out if it was just my imagination. I wasn’t imagining anything. Settlements are indeed taking longer. I found out why and I’m passing this information onto you.
The EDD Settlement Office Has a Lot of Cases
Perhaps it is due to your reading my articles touting the benefits of the EDD settlement process. It seems that over the past several months the workload in the Settlement Office has increased dramatically – two or three times the normal annual volume. The Settlement Office is a very small organization. They are flooded with cases. They are hiring and training new people who are experienced within the EDD generally, but not on how to settle a case. It is going to be quite a while before the EDD can take up the settlement slack.
Q&A About EDD Settlements
1. What does a settlement really mean? When you come down to it, a settlement means that you will have to pay the EDD something. You may not be happy with the EDD’s settlement offer, but a wise man once said, “A good settlement means that neither party is happy.”
2. How do you get a settlement? It starts with your contacting the EDD Settlement Office to request that your case be settled. A case can only be settled after an audit is complete, a Notice of Assessment issued, and a timely petition filed with the CUIAB.
3. If I do not file a petition can I still get a settlement? Generally not. The deficiency will have to be paid in full and a refund claim filed. Refund rules are very tricky, and you should consult with a professional on this matter.
4. How long will it take to finally settle my mater with the EDD Settlement Office? In today’s climate, at least one year. If you submit a settlement proposal, patience is required at your end.
5. Is a settlement process longer than one year likely? Yes, we have cases in our office that we submitted for settlement almost one and half years ago.
6. How do I make an offer to the EDD Settlement Office? There are no forms or set rules. Some people simply write a one paragraph settlement proposal offering to settle their case for a specific dollar amount. Others prepare rather formal settlement proposals. This may depend upon the issues involved and the complexity of your case.
7. What happens to my pending CUIAB case if I make an offer? The judge is required to take your matter off the hearing calendar if the settlement unit agrees to entertain your settlement. You will get a letter back from them either agreeing to entertain a settlement or a letter of rejection. If your case is rejected for settlement, your matter stays the hearing calendar. A later settlement may be possible with an EDD attorney.
8. Will interest accrue on my assessment while the settlement is pending? Yes, interest accrues on the assessed deficiency until the matter is settled. However, once settled, the interest may be abated if you pay the settlement amount in a lump sum. If you want installment payments on your settlement amount interest will accrue on the unpaid settlement balance.
9. If I settle my case for a smaller amount, is the accruing interest on the original assessment really a non-event? Yes, you are not required to pay interest on the original assessment if you agree to a settlement.
10. Does the settlement relate back to the original period of the audit (usually 3 years)? No, this is the great advantage to a settlement. If you take your case before a judge and you lose, the judgment relates back. If you pay the original assessment amount without filing a petition, the issues relate back to the beginning period of the audit. Relation-back may put you, the employer, in a bad position vis-à-vis new employee rights and entitlements.
Conclusion
I intend to follow up with periodic calls to the EDD Settlement Office to determine if the process has become more streamlined and efficient. I’ll keep you posted.
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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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