Need to review 1099 classification criteria? CLICK HERE: How do you minimize the risk of an EDD Audit? There is no way to eliminate the risk of a government agency audit, audits are performed on a number of criteria, from a site sweep in which contractors are randomly audited by… [Read more]
How Proposition 22 Continues to Influence the Gig Economy
After companies including Uber, Lyft, DoorDash, and others spent nearly $200 million campaigning for the addition of a ballot measure exempting them from the previously passed California AB5 ruling. They won, and so began Proposition 22. The passing of Proposition 22 protects drivers’ preferences to remain classified as independent contractors… [Read more]
Your Tax Day Checklist: How to Prepare to Avoid an Audit
Despite everyone’s awareness that tax day is rolling around each year, many companies still end up leaving their filings until the last minute. As a result, the last-minute filings can easily lead to accidental mistakes when filing. Nobody wants to intentionally make mistakes, but especially when it deals with your… [Read more]
Department of Labor Independent Contractor Final Ruling
On January 7th, 2021, the US Department of Labor (DOL) announced the updated ruling to clarify its interpretation of independent contractor status as part of the Fair Labor Standards Act (FLSA). Overall, the ruling stands largely unchanged from the original ruling which established a tiered test to determine employee versus… [Read more]
What Triggers an EDD Audit?
EDD Audit Triggers Independent contractor filed for unemployment A disgruntled worker (1099 or W2) reported your company to EDD EDD “randomly” selects your company based on a computer algorithm – one factor is the larger % of independent contractors versus employees compared to your company revenue i.e. Company with $2… [Read more]
How Long Does an EDD Audit Last?
How long does an EDD audit last? If EDD selects your company for an audit of your contractors, you can expect the audit to last between 3 months and 9 months. The purpose of an EDD audit The purpose of an EDD audit is to determine if your workers are… [Read more]
How Far Back Can IRS Audit You?
If IRS selects your return for an audit, the audit will generally cover a 3 year period. That is the statute of limitations IRS has to audit a tax return. More specifically, this is 3 years from the date you file your return. If you filed the last 5 years… [Read more]
Can an EDD Audit Turn into a Criminal Investigation?
In short, yes. If you are paying workers who are not reported on a 1099 or W2 (for instance you are paying workers in cash and have no record of their payroll or payments), EDD may assess a fraud penalty and could open a criminal investigation. If your contractors are… [Read more]
What Triggers an IRS Audit?
IRS selects returns for audit based on numerous criteria. Here are some common ways your return can be selected for an audit: You fail to report income that reported on a W2 or 1099 (this can be from a sale of real estate, 1099-S; non-employee compensation as an IC; 1099-MISC… [Read more]
What are the Different Types of IRS Notices?
There are a variety of different notices that IRS sends to taxpayers, not all of which are as intimidating as many assume them to be. To most, the initial response upon receiving any notice from IRS is a mild amount of panic and confusion. In many cases, this response is… [Read more]
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