ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – HOW TO GET A CONTINUANCE ON YOUR CUIAB HEARING
By Robert S. Schriebman
You have received a yellow CUIAB Hearing Notice setting your matter for hearing on short notice and on an inconvenient day. The CUIAB never contacted you in advance to schedule this hearing. You feel you are not prepared. You may be searching for professional representation. Is it possible to reschedule this hearing at a time and date more convenient for you?
There are several categories of CUIAB hearings. The three most common are hearings to determine if your late filed petition should be deemed timely filed due to reasonable cause. The second category is a “hearing for the final hearing.” During this hearing the judge will want to know how prepared you are, your estimate of the length of the hearing, the number of witnesses you plan to produce, and the nature of the documentation you wish to enter into evidence. The third category is a hearing on the merits. Some of the issues in this type of hearing are as follows:
- The correct status of workers treated as independent contractors.
- Do payments made to corporate officers constitute wages?
- Is the employer liable for contributions, withholdings, and penalties for failing to file returns or reports?
- Did the employer, without good cause, fail to furnish withholding statements to employees as required, and is the employer, therefore, liable for penalties?
- Issues relating to S corporation distributions.
- Should fraud penalties be imposed?
In my opinion there are two categories of continuances – front door continuances and back door continuances. I will discuss each category separately.
Front Door Continuances
Most administrative law judges do not favor granting continuances. You have to have a very good reason. Even so, it’s still going to be an uphill battle to convince the judge to grant a continuance. Judges are very busy people. When you request a continuance, your request throws off their schedule. We tend to look at our own pressing needs and we do not take into consideration the impact our requests have on our assigned judge.
Put It in Writing
In order to obtain a continuance, the first thing you must do is make a formal written request for the continuance. There is no specific form or template you are required to follow. You must clearly state the reason or reasons you are seeking a continuance. Merely asking for a continuance without stating reasonable cause will get you nowhere. Mail or FAX your request to the specific CUIAB office assigned to hear your matter. The FAX number is on the Hearing Notice. The clerk will then submit your request to your assigned judge. You will then receive a phone call from the judge, either granting or denying your request.
Here are a few examples of what may constitute reasonable cause:
- Death, serious illness, or unavoidable absence on the hearing date.
- Fire, casualty, natural disaster or other disturbances.
- Inability to obtain your records from your accountant, attorney, etc.
- Change of representation. You hired a new attorney or representative. In this case, the attorney or representative must make the request.
If You Wish to Appear by Phone
If your matter involves an issue of your filing a late petition and you wish that petition to be treated as timely filed, you may request to appear by telephone instead of in person. If your matter involves preliminary matters prior to an actual hearing on the merits, you may also request to appear by phone. Both of these types of requests should be FAXed or mailed to your assigned CUIAB local office. These types of requests are usually granted.
Lately the CUIAB is setting hearing dates within several months from the time a petition has been filed. A word to the wise – before you file your petition, get all your ducks in order for an actual hearing on the merits. If this is an impossible task, consider the back door approach.
Back Door Continuances
As I said earlier in this article, administrative law judges are, for the most part, reluctant to grant continuances. Hearing dates are now being set earlier than they were only a couple of years ago. This may be a blessing in disguise as most matters involving hearings on the merits, should have been settled. These are usually fact-driven issues where judges tend to give the benefit of the doubt to the EDD instead of the employer. The hazards of litigation to the employer are substantial especially in occupations involving contractors, truck drivers, and domestic caregivers. Keep in mind that if you elect a judge hearing and the judge rules in favor of the EDD, the negative ramifications are numerous including the risk of an IRS “me too” assessment.
If the judge denies your continuance request, you can remove the matter from the hearing calendar by submitting a settlement proposal to the EDD Settlement Office. Removing the matter from the hearing calendar has the same effect as a general continuance with no hearing date set in the future.
Keep in mind that a Notice of Assessment that results from an estimated assessment, as opposed to a full-blown audit, where books and records are reviewed, cannot be entertained by the EDD Settlement Office. This is why it is very important to cooperate in the audit process by furnishing the auditor with books and records the EDD is legally entitled to review. Gamesmanship and playing extreme hardball will get you nowhere.
If you do not like the results from your attempt at an EDD settlement, you can always have your matter placed back on the CUIAB hearing calendar. This will take enough time to enable you to get fully prepared for an administrative law judge on the merits.
Administrative law judges are busy people and they have crowded hearing calendars. Perhaps this is why they are reluctant to grant continuances. You can however, effectively continue the ultimate hearing by requesting that the EDD Settlement Unit take jurisdiction of your matter.
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. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.
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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