How to Handle an EDD Lien: Notification, Contributions, and Penalties

As a business owner, you are responsible for paying payroll taxes and filing periodic reports in accordance with your obligations. If you do not do so, you risk having a lien recorded against your property by the EDD. The details of tax liens are confusing to many people, but it’s important to understand what a lien is, why they are issued, and what your options are to avoid or discharge the...
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Franchise Tax Board (FTB) Offer in Compromise: California Offer in Compromise 101

It is a problem that many individuals or business owners in California have faced. You may have had a difficult year financially, and when tax time rolls around you discover that you owe more to the California Franchise Tax Board (FTB) than you can afford to pay. If this is your situation, there is light at the end of the tunnel. The FTB is willing to work with cooperative delinquent taxpayers...
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California Sales Tax Audit: Everything You Need to Know

Facing a sales tax audit is an intense time for any business. Even if you are sure that your bookkeeping and records are impeccable, the painstaking process of proving your honesty takes up a lot of time and resources, and hosting an auditor as they comb through your books is always a stressful prospect. Most California businesses will deal with a sales tax audit at some point, and ...
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Am I Going to Be Hit With an Estimated Tax Payments Penalty?

For many people, income tax withholding is something that happens automatically: you indicate your tax withholding rate to your employer on a W-4 form for federal taxes and a DE 4 form for California, and the taxes are taken out before you even see your paycheck. If your employer withholds at the correct rate, chance are you’ll end up with a nice refund at tax time.
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Sales Tax Audit Statute of Limitations: Is Time on Your Side?

A sales tax audit is a sobering ordeal, but it is one that many (if not most) California businesses will face eventually. If you are selected for an audit by the California Board of Equalization (BOE), you will have to prepare a wide range of documents and records for your auditor to review, but how far back will the BOE want to look, and what are your rights? Today we will take a look at the ...
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Employee Payroll Taxes: How the EDD Handles Misclassified Workers

Managing employee payroll taxes can get quite complicated, with a number of areas being particularly opaque. One of those is the question of employee classification; is a person properly classified as a worker or an independent contractor? Misclassifying workers as independent contractors carries with it some significant consequences, including penalties and even potential fraud prosecution,...
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Installment Agreements and the IRS: Settling Your Debt

In an ideal world, everyone would be able to pay their taxes in full and on time, but sometimes it just isn’t possible. If difficult circumstances mean that you are coming up short this tax season, it is probably the source of a lot of stress and anxiety. The instinct to avoid the issue may be strong, but it can cause your problems to multiply exponentially. Interest, penalties, and other...
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Trust Fund Recovery Penalty (TFRP): How the IRS Addresses Unpaid Payroll Taxes

Are you personally responsible for your corporation’s unpaid payroll taxes? We have discussed payroll taxes on the blog before, covering the basics, but today we are delving a little deeper into a specific area of payroll tax compliance and consequences: the trust fund recovery penalty, or TFRP. Also sometimes referred to as the “responsible person penalty,” this refers to a personal liability...
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An Introduction to Payroll Tax Fraud: EDD Investigations

Payroll tax fraud can occur either through deliberate criminal activity or simply because an employer or employee has provided inaccurate or incomplete information.  The Employment Development Department (EDD) takes payroll tax fraud extremely seriously, so it is imperative that you understand the ways in which fraud can occur and take the necessary steps to avoid committing fraud.
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Income Withholding Order: How to Process an EWOT

Being served with an income withholding order can be a disconcerting experience as an employer. These orders can come from a variety of sources, but they are all legally binding and require careful handling. Understanding how these orders work, what your obligations are regarding them, and how to comply with them is very important. Failing to do so can have severe consequences for you and your...
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