Filing a Late EDD – Board Petition WHAT TO DO
By Robert S. Schriebman
Your EDD audit has been completed, and you have received a Notice of Assessment. You want to fight it and present your case to an Administrative Law Judge (ALJ). In order to have “your day in court” you must file a petition with the California Unemployment Insurance Appeals Board (Board). A petition must be timely filed. This usually means the filing must be done within 30 days of the date of your Notice of Assessment. For the rules regarding timely filing see my article entitled Timely Filing Your EDD Board Petition.
Sometimes, however, petitions are not timely filed – they are late. If a petition is late you may be out of luck. You will have to pay the EDD and go through the cumbersome and expense refund process.
You may have a very good reason why a petition is late. ALJs have the discretion to rule that late filed petition is deemed timely. You may never have received the Notice of Assessment because the EDD sent it to the wrong address. On the otherhand, you may have had a communication problem with an EDD auditor or supervisor and may have misunderstood your rights and duties.
Recently I won a case before the Board where a petition was filed late due to a misunderstanding between the taxpayer and the assigned auditor. The taxpayer-employer and the auditor’s supervisor had difficulty communicating with the auditor, and he asked to speak to the auditor’s supervisor. According to the taxpayer the supervisor told him that a new auditor would be assigned to his case and he would be given another audit. He was told to ignore any notice of assessment that might be issued from Sacramento. That notice of assessment came and the taxpayer, following instructions, ignored it. Because he did not file a timely petition, the notice of assessment became final and subject to collection. The next thing the taxpayer knew was that he was dealing with an EDD collector.
The taxpayer brought the matter to my attention about six months after the Notice of Assessment was issued. I filed a late petition and requested and ALJ hearing. The judge conducted a hearing over the telephone. After listening to the testimony from both my client and the EDD, and reviewing the documentary evidence in the case, the judge issued his decision. The judge ruled that due to an honest misunderstanding the late petition was deemed to be timely filed. For the taxpayer this meant that he can have a hearing on the merits and no collection action can be taken against him while the matter is pending before the Board.
Here are the rules you need to know concerning timely and late petitions:
A petition for review or reassessment must be filed with 30 days of service of a Notice of Assessment or denial of Claim for Refund. An addition 30-day period may be granted by the Administrative Law Judge (ALJ), upon a showing of good cause. If a petition is not filed within the 30-day period, or within the additional period of time granted by the ALJ, the Assessment or denial of Claim of Refund is final at the expiration of the period. (Unemployment Insurance Code, § 1222)
A petition is deemed filed on the date it is sent in writing to the applicable office of the appeals board or EDD office handling your audit. It may be mailed, shipped by express service common carrier, electronically transmitted or physically delivered. (California Code of Regulations, title 22, § § 5000(gg) and (zz).)
The Board sometimes renders decisions that it believes to be so significant or unique that it labels that decision, “Precedent Decision.” Both the EDD and ALJs are absolutely bound by these types of decisions in the same manner that the IRS is bound by a regulation or a major Tax Court decision.
In Precedent Decision P-T-364 the Appeals Board held that the following method should be used in computing the period in which a petition may be filed:
- calculate the basic 30 days, excluding the first day and including the last day;
- if the 30 days ends on a Saturday, Sunday, or holiday, the deadline is extended to the next business day;
- add any mailing extension provided for in § 1013 of the Code of Civil Procedure, § 1013; and
- if the mailing extension ends on a Saturday, Sunday, or holiday, extend the deadline to the next business day.
If the petition is filed within the period established by the above method, it is timely. If the petition was filed after such date, it may be considered only if it was filed within the 30-day extension period and there was good cause for the delay. The extension period is computed as follows:
- add 30 days to the date calculated in steps 1 through 4; and
- if the additional 30 days ends on a Saturday, Sunday, or holiday, extend the deadline to the next business day.
If the petition is filed beyond the date established by steps 5 and 6, it cannot be considered on the merits unless estoppels can be invoked against the EDD.
In conclusion, if you believe you have a valid reason why you did not timely file your petition, consider filing a late petition and asking a judge to hear your reasons. Many late petitions are deemed to be timely filed after all.
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.