Ask The California Employment Tax And Payroll Tax Attorney – What You Need To Know About Edd Petitions – Part 2

By Robert S. Schriebman

2024

Introduction

This series of articles will give you the basics of EDD petitions. In Part 1, I discussed the following topics:

• When to file your EDD petition.
• What goes into a typical petition.
• Where to file your EDD petition.
• How to file your EDD petition.

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

EDD’s Answer

After the petition has been filed, the EDD may respond by filing an Answer. This is usually done by the manager of the Area Audit Office (AAO). The Answer is served on the employer by mail. The Answer will set forth the EDD’s legal position. Unlike civil litigation, you are not required to file a response to the Answer.

Accrual of Interest

Filing a petition does not suspend the accrual of interest due on the assessment amount. In order to stop the accrual of interest, or to reduce the accrual, you may want to consider making a payment towards the assessment. If you elect to pay the assessment in full, your payment will be deemed an automatic claim for refund by operation of law. If you prevail at the hearing, or you reach a settlement with the EDD Settlement Office, you will receive a refund or any overpayment plus interest according to law.

Taking Advantage of the Settlement Process

After a petition is filed, you may wish to settle your matter prior to any hearing on the merits. Some say a good settlement is better than a good lawsuit. Once your matter is being handled by the Settlement Office, the case is taken off the CUIAB hearing calendar. If you agree to a settlement your matter is over and your petition will be dismissed by the CUIAB. If you cannot reach an agreeable settlement your case will be reinstated with the CUIAB, and you will be afforded a hearing on the merits. There are many articles on this website that discuss the settlement process. You may wish to review them.

Withdrawing Your EDD Petition

Even when a petition is filed with the CUIAB, you may at anytime prior to the hearing, submit additional information to the EDD which may lead to a potential favorable adjustment to the original assessment. If this happens, you may withdraw your petition at any time before a judge decision is issued. There are forms available for withdrawing a petition or you may send a withdrawal letter to the CUIAB.

Hearing Process

The most important thing to remember when electing to proceed to a hearing on the merits is one word: PREPARATION. The CUIAB is independent from the EDD. A smart employer will engage the services of an experienced and knowledgeable professional representative such as an attorney or a CPA. The time and place of the hearing are determined by the local Office of Appeals. Prior to the hearing you may be required to attend a telephone pre-hearing conference with the assigned judge. At this hearing the judge will want to know how many witnesses you intend to produce and will discuss issues of evidence. The purpose of the pre-hearing conference is to have a complete and efficient hearing.

During the hearing, each party will have the right to call and examine witnesses, and to introduce exhibits. You should bring to the hearing all evidence (witnesses and documents) that you believe has a bearing on your case.

The Appeal Process

After the administrative law judge (ALJ) has reviewed, heard, and rendered a decision on your case, you have 30 days from the date of the ALJ’s decision to file an appeal with the CUIAB Appeals Board. If the CUIAB Appeals Board denies your petition, you may pursue your appeals rights. Once your liability has been paid in full, you may file a claim for refund with the EDD. If your claim for refund is denied, you may file a second petition with the CUIAB.  In other words, you get a second bite at the apple.

Conclusion

My motto has always been to never take a tax assessment lying down. Get up and fight it. Be proactive.

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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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