Paying employees “under the table,” issuing blanket 1099s, or skipping payroll deposits might feel like harmless shortcuts—until the day an envelope marked IRS or Employment Development Department (EDD) arrives. Inside is a California Notice of Assessment (NOA) that compresses every alleged payroll misstep—unreported cash wages, misclassified workers, unpaid state disability, and unemployment insurance contributions—into one intimidating dollar figure, plus penalties that can exceed 50 percent of the tax. Ignore the NOA for thirty (30) days, and it becomes final, collectible, and personally enforceable under Unemployment Insurance Code (UIC) § 1735. Respond strategically, and you can move the dispute into an administrative forum where evidence, legal argument, and seasoned counsel can potentially reduce or mitigate the tax liability, penalties and interest that will certainly be at issue.
Our dual-licensed Criminal and Civil Tax Defense Attorneys & CPAs at the Tax Law Offices of David W. Klasing will guide you through every stage of a California or federal payroll-tax appeal, weaving in the statutory deadlines, procedural traps, and settlement opportunities that often make the difference between a mitigated civil resolution to your case versus a life-altering criminal tax referral. Call us at 800-681-1295 or contact us online for a reduced-rate initial consultation.
Decode the California Notice of Assessment and Stop the Clock
- Thirty-day deadline. Under UIC §§ 1222 & 1224, you have 30 days from the NOA mailing date to file a Petition for Reassessment with the California Unemployment Insurance Appeals Board (CUIAB). Filing the petition suspends collection and interest accrual.
- Mailing extensions. When calculating your 30-day deadline, remember that the UIC grants extra mailing time if the NOA is served by mail: add 5 days if you’re within California, 10 days if you’re elsewhere in the United States, and 20 days if you’re abroad.
- Personal liability warning. UIC § 1735 allows EDD to assess payroll taxes, penalties, and interest against any officer, owner, or “responsible person” who willfully failed to pay.
It would be wise to have our dual-licensed Tax Attorneys and CPAs file your petition for reassessment immediately—drafted under attorney-client privilege—to suspend the 30-day deadline and halt any collection activity we assemble and perfect your defense. Call us at 800-681-1295 or contact us online for a reduced-rate initial consultation.
Petition for Reassessment & Confidential Settlement
Your Petition for Reassessment must be razor-sharp: identify the Notice of Determination (NOA) number, assessment periods, and disputed dollars; cite each ground for relief (worker classification, statute of limitations, reasonable-cause penalty abatement); and demand an Administrative Law Judge (ALJ) hearing. We will help you draft a concise statement of facts, pinpoint controlling UIC sections, and include a preliminary exhibit list—enough to show the appeal’s merit without disclosing the privileged strategy.
Once docketed, the file moves to the EDD Settlement Office, where negotiations occur in strict confidence. At the tax law offices of David W. Klasing, we will help you submit a written offer that lays out the following:
- Risk of loss to the state on misclassification or time-bar grounds
- Estimated litigation costs EDD would incur
- Proposed settlement amount and terms (lump-sum or installment)
EDD weighs fairness, financial hardship, and business survival—but only when you demonstrate real legal hazards. Offers over $500 trigger public disclosure and ALJ approval, whereas more complex cases may require CUIAB and Attorney General sign-off.
Building Your Record & Prevailing at the ALJ Hearing
In the weeks leading up to your Administrative Law Judge (ALJ) appearance, our dual-licensed Tax Attorneys and CPAs will leave nothing to chance. First, we obtain the entire audit file—including every working-paper and the EDD’s formal answer—so there are no surprises. Next, we draft and serve targeted interrogatories and, where the ALJ permits, schedule depositions to lock in the auditor’s testimony. We secure critical evidence through subpoena duces tecum—bank records, contractor files, payroll-service logs—and distill it all into a razor-sharp pre-trial brief that marries the governing statutes and regulations to your fact pattern and controlling industry precedent.
When the hearing opens, we run it like a high-stakes trial:
- Cross-examine the auditor on sampling methodology, alleged “badges of fraud,” and cash-wage assumptions;
- Introduce airtight exhibits—executed contractor agreements, insurance certificates, multi-client invoices, and compliant accountable-plan policies;
- Present live witnesses who handled payroll deposits and worker onboarding to establish good-faith compliance;
- Press for penalty abatement under IRM 20.1 analogs and the UIC’s reasonable-cause standards.
Remember: EDD carries the burden of proof. If we create reasonable doubt on even one element of the assessment, the entire case can collapse in your favor.
Appeals Board & Superior Court Review
If the ALJ rules against you, you have 20 days to appeal to the CUIAB Appeals Board, which reviews the record de novo and may grant oral argument (but typically confines itself to the existing evidence).
After exhausting administrative remedies—and only after paying the assessment, filing a refund claim, and obtaining a denial—you may pursue judicial review in Superior Court via a writ under CCP § 1094.5. This must be filed within 90 days of the Board’s decision; EDD may extend that deadline by up to two years upon a timely written request (UIC § 1241).
At both stages, our team at the tax law offices of David W. Klasing will handle the briefing, preserve your procedural rights, and press constitutional or statutory defects—ensuring you never miss a deadline or any procedural safeguard.
Contact the Tax Law Offices of David W. Klasing for an Appeal of California Payroll Taxes
At the Tax Law Offices of David W. Klasing, we will help you dismantle EDD assessments on every legal front. We invoke UIC § 1132 to bar any assessment more than three years old unless the EDD can prove fraud, and we apply Borello, Dynamex, AB 5 carve-outs, and the federal Section 530 safe harbor to validate contractor status. We aim to neutralize claims of willful non-payment under UIC § 1735 and IRC § 7202 by presenting board minutes, emails, and cash-flow logs that document your good-faith compliance. Furthermore, we will help you eliminate negligence and fraud penalties by showing reasonable cause—whether relying on CPA advice, industry custom, or honest record-keeping mistakes—so your assessment shrinks or vanishes well before the ALJ issues a decision.
Your bookkeeper or outside CPA cannot invoke attorney-client privilege and may be compelled to testify, often shifting blame to preserve their license. Our dual-licensed criminal tax defense attorneys & CPAs shield every admission under attorney-client and work-product privileges, issue Kovel letters so forensic accountants work in confidentiality, negotiate Information Document Requests down to the essentials, stages read-only inspections of electronic records, and negotiate settlements that keep matters civil and businesses intact.
David W. Klasing is one of fewer than 24,000 professionals nationwide holding both attorney and CPA licenses—and under 3,000 of those also have earned a Master’s in Taxation. Our exclusive focus on high-risk civil and criminal tax controversies, single transparent hourly rate, and appointment-only satellite offices statewide ensure you get elite, tailored representation. Our A+ BBB rating and perfect 10.0 AVVO score reflect an unbroken record of payroll-tax victories.
Act now—before the EDD dictates the terms. Call 800-681-1295 or schedule a reduced-rate initial consultation online HERE. We will file your petition on time, marshal the evidence, and drive your appeal to the most favorable civil outcome—keeping your business operational and you out of clandestine IRS-CI’s crosshairs.
