All federal and state taxing agencies perform audits to ensure compliance with their laws. Louisiana Employment Security Law is contained in Louisiana Revised Statutes Title 23, Chapter 11. Section 1661 gives the Louisiana Workforce Commission the right to audit employer records. The department has the power to require employers to allow review of their books.
It may be any of several reasons. Often, it's random. To ensure that the system works well, the department needs to sample employer compliance, often by size and type of firm. A former employee may have filed a claim for unemployment insurance on wages you have not reported or have reported differently. You may not have regarded this person as an employee. We need the facts. Sometimes an employer is suspected of failing to report employees or reporting incorrectly. Again, we need the facts.
An auditor confirms that all wages have been reported correctly and that all taxable wages have been computed correctly. The most common types of payroll not reported involve payments for contract labor, commissions, corporate officer's remuneration, and independent contractors.
This is a major area where questions arise. Often, employers pay for what they believe are independent contractors, wages not subject to the law. Later they find out these people are employees and should have been reported. You also may have liability for casual labor, commissions, payment or other remuneration to corporate officers. The auditor will make a finding using clear legal and administrative guidelines.
A normal audit is for one calendar year. If there is an exception, however, the audit may cover three or more calendar years. The auditor will explain the situation to you.
Records reviewed include payroll records, W-2s, 1099s, IRS, state Department of Revenue records, and general disbursement records, such as your check record journal, invoices, and canceled checks.
It depends on the number of employees, the condition of your records, and any irregularities that are found. Some audits take three to four hours. Others will take longer. The auditor will best be able to answer this question in the detail you need.
The audit will occur wherever the records are kept. Often this is the employer's office, but sometimes the records are at an accountant's office. If you prefer, you may bring your records to the auditor's office.
That's up to you. It would be wise, if you believe your accountant has a better grasp of your records than you have.
The department still may want to audit your records to confirm this.
You will get the results when the audit is complete. The auditor will have a close-out with the authorized representative
You must pay any tax, interest, and penalty due. If you can't pay the entire amount immediately, you usually can arrange a payment schedule with the administrative office.
You need to contact the other agencies to determine if you owe them additional tax.
You may request a hearing. This will be before a neutral hearing officer. From the date of the Notice of Tax Assessment, you have 20 days to request the hearing. Your request must be in writing and state why you believe that notice is unjust or incorrect.
Yes. Further legal action will not be taken until the decision is rendered.
Call your local employment tax office, or (225) 342-2992, or contact the UI Call Center @ 1-866-783-5567.