Timely Filing your EDD – Board Petition

By Robert S. Schriebman

Most EDD audits involving employee versus independent contractor issues result in some type of assessment. The taxpayer will receive the first document entitled Notice of Proposed Assessment. Things sometimes get confusing here. People mistakenly believe that they must file a petition to the California Unemployment Appeals Board (Board) once the “proposed” notice is received. This is not true. Several weeks after the proposed notice is issued the EDD will follow up with a second document entitled Notice of Assessment. Accompanying this notice will be publications stating your rights to appeal. Read those documents carefully; follow the instructions.

Once you receive the Notice of Assessment you must timely file a petition with the Board. You can also send your petition to the EDD audit office. Sending a petition to a EDD audit office counts as a proper filing. No special form is required for your petition. You could literally say, “Hey, I don’t agree with this assessment, and I want a hearing before the Board and in front of an ALJ.” Attach the Notice of Assessment to your petition. Usually lawyers of accountants prepare a more formal presentation.

It is very important for your petition to be timely filed. It should be sent in a manner in which you can prove that it was timely mailed. Most people use the Post Office and get Proof of Mailing. You may also use Federal Express, UPS, etc. If your petition is late you have an uphill battle to prove reasonable cause for a judge to allow your petition to be timely filed.

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:

1. calculate the basic 30 days, excluding the first day and including the last day;
2. if the 30 days ends on a Saturday, Sunday, or holiday, the deadline is extended to the next business day;
3. add any mailing extension provided for in § 1013 of the Code of Civil Procedure, § 1013; and
4. 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:

5. add 30 days to the date calculated in steps 1 through 4; and
6. 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.

***

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.