1. “Out of all the things in the world that we don’t have time for right now…I didn’t even know they did audits…why us, why now…wonder how much that will cost…I hate auditors…better call the boss…who turned us in…wonder if we can reschedule that appointment…” HOW TO SURVIVE AN UNEMPLOYMENT TAX AUDIT

2. “WHY US?” Random audits Benefit related audits External information Task force

3. THE PROCESS Section 1800 average business might take a full day (maybe some follow-up) one person is coming with a laptop (they will need a place to work)

4. WHAT WILL WE LOOK AT? Almost everything on the payables side: We will reconcile all of your payroll with our records We will look at your general ledger and check register

5. We will pay special attention to your 1099s misc and other records of contract labor We will examine your income tax filing records And anything else that might have pertinent information (not so much involved with earnings and revenue)

6. PAYROLL ISSUES Make sure names and SSNs are correct Verify your excess wage calculations Verify correct additions and subtractions from wages: medical insurance, 401K, cafeteria plans

7. MISCLASSIFICATION OF WORKERS Section 212!!! Unemployment law and Federal law are different Our definition of an “independent contractor” is very specific

8. To consider a worker an independent contractor you must meet 3 conditions all at the same time (and the language in any contract does not control the situation)

9. PART A The work must be done free from direction and control there are a variety of factors must be true both under the contract of services and in fact

10. PART B Must be done outside the usual course of the business OR Outside of all the places of business

11. PART C The individual in question must be engaged in an independently established trade, occupation, profession or business (related to the services being performed) The burden of proof is on the employer!

12. YOU OWE MONEY! ? ##@**@#!!! You get 10 days to present more evidence You will receive a Determination and Assessment This is the protestable document you get 20 days to file a protest

13. THE PROTEST First level is a phone hearing with an administrative law judge Second level is filing objections to the decision Third level is your county circuit court

14. PROTECTION Stay informed: Google IDES and section 212 every now and then Self examine: you have our exact method Keep contractor files with evidence!!!