What to Do When Your EDD Petition Is Late
It happens to the best of us, we miss a filing deadline. You have been audited by the EDD and they have issued a Notice of Assessment. You had 30 days to file your petition with California Unemployment Insurance Appeals Board (Board) and you blew it. Your case has been turned over to an EDD collector who is demanding payment in full and is threatening to file a lien notice against your company. You believe you have a good case to take before the Board. You feel you can prove that your workers are truly independent contractors and not employees. These are the questions you should be asking:
- Will the Board accept an untimely petition?
- What do you have to do to get the petition heard if it is untimely?
- Can the problem resolution people help you handle this?
- Is there anything like an audit reconsideration that will pull the case back tot he EDD audit or protest people?
1. Will the Board accept an untimely petition?
When the EDD issues a Notice of Assessment the taxpayer has 30 days to file what is considered a timely petition. What happens if the petition is filed beyond this 30-day period? CUIC Sec 1222 and Reg 5052 provide that the Board may grant an additional 30-day grace period providing the reasons for late filing are stated in the petition document. For example, a client came to me on the 35th day after the Notice of Assessment was issued. The Notice was not sent to the proper address. I filed the Petition using FedEx so I could make sure as to when the Petition was delivered. In the Petition itself, I stated the reason for the late filing. The Board accepted my Petition as timely.
Practice Pointer- Whenever you file a petition with the Board, always do so either by certified mail return receipt requested or use Federal Express or equivalent. If you use the Post Office, always get your certified receipt “round stamped”. In this way you will have absolute proof of when you filed the petition and when it was received by the Board.
2. What do you have to do to get the petition heard if it is untimely?
If you file your petition later than 60 days from the date of the Notice of Assessment, and you set forth in the petition your reasons for the late filing, the Board will allow your petition to be filed but not necessarily treat the filing as timely. The Board will set up a telephone hearing with an administrative law judge (ALJ). The judge will hold a full hearing with your client present as well as an EDD representative. Sworn testimony will be taken and the judge will eventually issue a written decision as to whether to allow your late petition to be treated as a timely filed petition.
Practice Pointer- To prepare for this hearing you should contact the EDD to request a copy of their entire file on your client’s audit as well as the EDD’s procedures in issuing the Notice of Assessment. This should be ordered as soon as you file your late petition.
3. Can the problem resolution people help you handle this?
4. Is there anything like an audit reconsideration that will pull the case back tot he EDD audit or protest people?
This is really one question. The EDD does not have a structured audit reconsideration process. Many times the defaulted Notice of Assessment becomes final and is turned over to the EDD’s Collection Division. You can contact the assigned collector and request that copies of the internal files and records regarding the assessment process be sent to you. If the collector is not familiar with your request or refuses your request, ask to speak with his or her supervisor.
If the case has not been assigned to a collector, or you are not getting the cooperation you feel you need, contact the EDD Taxpayer Advocate’s office. The contact information can be found on the EDD’s website or you can fax them at 916.654.6969. I have found the Advocate’s Office to be absolutely outstanding in their help and their prompt responses. They can obtain internal files and send you the information and documentation you need to determine if you have any grounds to file a meritorious late petition.
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.