For California businesses, few government interactions feel as disruptive as an audit from the Employment Development Department (EDD). Payroll records are requested. Worker classifications are examined. Questions arise about contractors, wages, and tax filings that may go back several years.
Many business owners initially assume an EDD audit is simply an accounting review. In reality, it is a
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EDD Audits Are Expanding to Eight Years
For many California business owners, an EDD audit feels contained. There is an assumption that if something goes wrong, the review will be limited to a few recent years and can be dealt with accordingly. That assumption does not always hold.
The Employment Development Department has the authority to expand a typical three-year audit window out to eight years under
CPAs: How to Help Your Clients Avoid (and Navigate) EDD Audits
California employers operate in one of the most closely monitored payroll tax environments in the country. The California Employment Development Department (EDD) oversees payroll tax compliance for unemployment insurance, employment training tax, state disability insurance, and California personal income tax withholding. For many businesses, an EDD audit begins through routine compliance reviews, industry enforcement initiatives, or information sharing between agencies.
What Happens When the Franchise Tax Board Disagrees With Your Federal Return
For many California business owners, federal taxes receive the most attention. Returns are prepared, filed with the Internal Revenue Service, and the assumption is that the same numbers flow directly to the state. In reality, California’s Franchise Tax Board operates under its own authority and may review federal filings independently.
When the Franchise Tax Board reviews a federal return and
Construction Business Owners Guide to EDD Audit Defense
Construction businesses operate in one of California’s most heavily scrutinized regulatory environments. EDD audits are common in this industry because subcontractors, short-term projects, and fluctuating labor needs create classification risk at scale. When EDD audits a construction company, it is not evaluating intent. It is evaluating facts, documentation, and whether worker relationships comply with California law.
This guide explains how
Who Should Defend a Business in an IRS Audit?
When the IRS contacts a business, the question is not whether the notice is serious. It is who should stand between the business and the government.
Many business owners assume an IRS audit is an accounting problem. It is not. An IRS audit is a legal process governed by complex tax statutes, procedural rules, evidentiary standards, and enforcement priorities. Choosing
EDD Site Sweeps in California Construction, What Happens Next and How to Prepare in 2026
Consequences of EDD Site Sweeps
If you run a construction company in California, it is important to plan for enforcement activity before it shows up on a job site. Many contractors do not realize they are at risk until investigators walk onto a site, start asking questions, and document what they see. When that happens, the next phase can move
California EDD Audit Guide for Construction Businesses
Job Site Sweeps, Independent Contractor Classification Under AB 5, How Far Back EDD Can Look, and How to Prepare
California construction companies continue to face a high level of scrutiny around worker classification and payroll compliance. Many audits do not begin with a letter. They begin on a job site, when investigators ask workers questions, document what they observe, and
Inside the EDD Audit Playbook EVENT March 19 2026
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My Business Received an EDD Audit Letter, What Do I Have To Do To Respond?
When a business receives an Employment Development Department (EDD) audit letter, the clock starts immediately. The state is signaling that it believes there may be errors in payroll reporting, worker classification, or tax filings, and failing to respond correctly can turn a manageable review into a costly assessment.
Understanding why the audit was triggered, what the EDD is looking for,