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What is an EDD request audit?

On: July 24, 2020

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In California, there are some audits that you’ll inevitably run into and some that you should be worried to go through. The Employment Development Department, or EDD, deals with all payroll and employee payroll matters in the state and will often subject you to random audits. Unlike verification audits, which are random, automatic audit from the EDD that every business owner is subject to and depend on the size of your company, request audits are not random and are more serious. They are done because something has been flagged in their system or they have gotten a complaint against you or business that they are following up on.  When it comes to dealing with these matters, here are some things to keep in mind going forward. Get a lawyer  One of the first things you should do is get some legal representation on your side. Make sure to call Leading Tax Group and don’t attempt to do it yourself. Not having a lawyer can mean that small things get through the cracks and could mean the difference from more stress and bigger fines if you are unlucky. A lawyer also has done these before, which makes them a great resource when looking into and preparing for an EDD request audit. They can walk you through the process and make sure that everything you have is up to code. Make sure employee data is current and correct During an EDD request audit, they will be primarily looking at your payroll matters and matching them up to all of their records. Making sure that all employees are being labeled correctly, paid correctly, and the correct amount of taxes are being taken out is a necessary requirement for business owners to not deal with request audits. Having a solid record-keeping system will and can go a long way into keeping your company or business open for another day. Pay your taxes on time The EDD will leave you alone for the most part if you follow all the rules in a correct manner. Not paying on time, having sloppy records, or leaving out information can get you flagged in their system and subject you to an EDD request audit. Not only will it make things worse down the line for you, but having problems and not paying on time can open the door for more questions and make things harder as a business owner. The more you do to pay on time, the less you’ll have to worry about if the auditors come knocking at your door. Going forward with an EDD request audit Make sure that you do not panic.  While it is true that the auditors are not on your side, being calm and collecting all the required information will go a long way.  Make sure that you do not lie and take good records of your daily operation and you should be good to go for the long haul.
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