Ask The California Employment Tax And Payroll Tax Attorney – What You Need To Know About Edd Petitions – Part 1

By Robert S. Schriebman

2024

Introduction

This series of articles will give you the basics of EDD petitions. In Part 1, I will discuss when to file the petition, what goes into a typical petition, how to file the petition, where to file the petition, and what you can expect after your petition has been filed.

When to File Your EDD Petition

EDD petitions are usually the end result of the audit process.  If the EDD auditor finds that there are deficiencies in employment and withholding taxes, the auditor will issue to the employer a Notice of Assessment (NA).  The assessment process has two parts:  1) the Proposed Notice of Assessment (PNA), and 2) the final Notice of Assessment (NA).  The PNA is sent about three weeks prior to the issuance of the final NA.

You cannot file a petition until you receive the final NA.  If you file a petition upon the receipt of the PNA, the California Unemployment Insurance Appeals Board (CUIAB) will not issue a case number and will not calendar the matter for hearing.

30 Day Filing Deadline

The final NA must be filed with the CUIAB no later than 30 days from the date it is issued or mailed.

What Goes Into a Typical Petition

In my practice I have found that there are two basic types of petitions: the short version and the long version.  I have seen petitions as short as a few lines. There is no special form for a petition.  The most important thing is to notify the CUIAB that you disagree with the NA, and you wish to have a hearing on the merits before an administrative law judge.  The NA has vital information such as the date the petition was issued and mailed, the EDD account number and the periods of assessment which should be listed on the petition.

Short Version

The most important things to remember are to attach to your petition a copy of the NA. You should also inform the CUIAB that you disagree with each, and every part of the assessment and you wish to have a judge hearing on the merits.

Long Version

The long version must also attach a copy of the NA.  There should be a request for a judge hearing.  I always put in a section stating the findings of the EDD to which the petitioner takes exception.  There should also be a clear statement of the facts supporting your position and any argument you wish to present.  If any portion of the NA is barred by the statute of limitations for assessment, it is vital to point this out to the CUIAB. There should also be challenges to any penalties that you disagree with.

Where to File Your EDD Petition

The petition is filed with the CUIAB in Sacramento addressed as:

Office of the Chief Administrative Law Judge

California Unemployment Insurance Appeals Board

First Floor, Suite 150

2400 Ventura Oaks Way

Sacramento, CA 95833-3291

How to File Your EDD Petition

Some people simply mail the petition and do nothing else.  This is a dangerous practice.  If the petition is delayed, lost or destroyed, you have no proof of mailing.  A petition must be filed within 30 days of the issue date or the mailing date.  If the CUIAB does not receive your petition in time, you will be out-of-luck. A timely petition means that you do not have to pay the deficiency until your matter is concluded.   An untimely petition means that you must fully pay all taxes, penalties, and interest before you can petition the CUIAB.  After payment, you must file a claim for refund. If the claim is not honored, you then are allowed to file a refund petition.

This is why it is important send the petition via certified mail and get it “round-stamped.” The round stamp is proof firm that you timely filed the petition.  A timely deposit in the mail is deemed timely filed with the CUIAB.  You may also use USPS Priority, Fed Ex or UPS.

Note: Do not use Fed Ex Ground.  A recent US Tax Court decision held that the use of FedEx Ground is not recognized as a proper courier.

Conclusion

In Part 2, I will discuss the EDD’s Answer, accrual of interest, withdrawing your petition, EDD settlements, and finally the hearing process.

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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 50 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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