What do you need to know about payroll audit risk and trust fund penalties in San Diego?
Many San Diego business owners find themselves in an Employment Development Department (EDD) or IRS payroll audit. The California EDD is authorized to conduct audits of business payroll taxes. The IRS also conducts payroll audits searching for violations that result in trust fund penalties and other tax revenue.
San Diego businesses are required to deduct taxes from their employee payroll for Medicare and Social Security. These are to be kept in your company trust fund until they are ultimately paid to the IRS.
The EDD audits all California businesses regularly (usually on a 3 year cycle) to ensure that all taxes associated with payroll and the business itself have been paid. The EDD will also look for misclassification of employees as independent contractors.
California business owners face substantial payroll audit risks and trust fund penalties if they do not carefully manage, document and report associated data. The most concerning news for all business owners is that the IRS and the EDD compare notes. If one agency discovers a discrepancy a knock on your door from the other is soon to follow.
The experienced California and IRS tax attorneys at Allen Barron are uniquely positioned to counsel San Diego business owners regarding payroll, taxes and all operational aspects of your company including the proper classification of employees or independent contractors. Our unique combination of tax, accounting and legal representation ensures that your company remains in compliance with all Federal, State and Local taxes and employment laws to avoid audit complications resulting in trust fund penalties and additional tax exposure. If you have been contacted by the California EDD or the IRS for a business tax audit we invite to contact us immediately or call today for a free consultation at 866-631-3470.
Payroll audit risk and trust fund penalties have become a greater concern for California business owners simply due to the nature of information sharing between the IRS and the EDD. Our experienced audit attorneys protect your interests at each step of the process, carefully managing all communications with each tax authority.
We provide proven and sound counsel and advice regarding the strategy of the auditing agency and your potential exposure for additional taxes and penalties. Payroll audit risk and trust fund penalties can result in substantial financial exposure for any San Diego business. It is important to ensure that you have expert representation.
The tax attorneys at Allen Barron represent you throughout the audit process, drawing upon our legal and accounting expertise in addition to our experience in all tax scenarios. We are able to extend the protections of the attorney client privilege and reduce your exposure in these sensitive situations.
