In California, there is the legitimate economy in which employers and employees pay taxes, and then there is the “underground economy” where workers are paid under-the-table and their wages go untaxed. Although the underground economy is difficult to measure, it is estimated that California experiences an annual loss in tax revenue of more than $8 billion annually.
The Employment Development Department (EDD) is a part of the Employment Enforcement Task Force (EETF), which has the goal of bringing into compliance individuals and businesses in the underground economy. EETF agents from the EDD and other member agencies jointly conduct onsite inspections of businesses by interviewing owners, managers, and workers to determine if businesses are in compliance with payroll tax, labor and licensing laws.
Contact the Experienced California State Tax Attorneys at Brown, PC for Help
If the EDD suspects your business of being part of the underground economy, this is a critical situation and you need to contact an experienced attorney immediately. The tax attorneys of Brown, PC have extensive knowledge of California tax laws and can help guide you through this dire predicament. We represent clients in Los Angeles and throughout California. To speak with one of our state tax attorneys about your matter, please contact the firm online or by calling 424-252-1100.