EDD Updates: Inside the Employment Development Department.

• Author: Counts, James C., II
• Position: Regulatoryupdate

As the CalCPA Committee on Taxation liaison to the California Employment Development Department, I meet regularly with EDD Tax Branch management. The following are updates from a recent meeting.

Collection Division

EDD divisions are working to improve their technology systems to be more efficient and productive. Toward that end, a new system is the Benefit Overpayment Collection Automation (BOCA) project, which is due in June. This program will help maximize the collection of Unemployment Insurance (UI) and Disability Insurance (DI) benefit overpayments. BOCA will automate much of the process to do bank levies, flexible payment due dates, monthly repayment amount proposals based on business rules and electronic payment options.

Field Audit and Compliance Division

FACD previously received authorization to hire additional auditors, who, in 2017, started to reach normal productivity for field auditors --so the number of audits has increased. The federal Department of Labor wants the EDD to audit 1 percent of all employers each year. At the beginning of February, the EDD had about 1.4 million employers, and it's believed about 9,000 employers are audited in a year.

Tax Processing and Accounting Division

The work TPAD does has an effect on the entire EDD Tax Branch. To begin with, employers with 10 or more employees were required to electronically file their returns and pay electronically as of Jan. 1, 2017. All other employers were required to file and pay electronically as of Jan. 1, 2018. As of the third quarter of 2017, 97 percent of employers with 10 or more employees and 68 percent of employers with fewer than 10 employees are doing so electronically.

Because of this requirement, less paper is being filed with Tax Branch, so employees who used to spend time scanning documents and correcting scan errors, are shifting to other duties.

The division now processes the compliance adjustments and correspondence work items that used to be done by CD and field collectors, which frees up those field collectors to work on more assigned field collection cases.

California UI Appeals Board

For an overview of the tax appeals process and how to file an appeal for both tax and benefit issues, visit cuiab.ca.gov/Documents/cuiabAppealsProcedureManual.pdf.

The CUIAB receives about 3,700 tax petitions each year, a majority of which can be grouped into one of two categories:

* Tax Audits: Usually from a notice of assessment or denial of claim for refund, such...