Facing an Employment Development Department (EDD) audit can be challenging for any business owner. With the complexities of tax laws and the potential financial implications at stake, it’s crucial to be well-prepared before entering into such an audit. As we step into 2024, navigating the EDD audit process requires careful consideration and strategic planning. John Milikowsky of Milikowsky Tax Law discusses the challenges businesses face when confronted with an EDD audit. 1. Understand the Scope Before diving into an EDD audit, it’s essential to understand the scope of the examination. Famil ..read more

Navigating an IRS audit involves understanding and complying with specific document requests, particularly concerning expense verification. In this second installment of our common questions series, John Milikowsky, founder of Milikowsky Tax Law, delves into what records are essential during an audit and the consequences of non-compliance. Documenting Expenses for the IRS When facing an IRS audit, the importance of providing comprehensive records cannot be overstated. If an audit letter specifies expenses such as mileage, travel, and cost of goods sold, it is crucial to substantiate these wi ..read more

At Milikowsky Tax Law, we frequently encounter questions from clients about the intricacies of IRS audits. It’s essential to understand the process and the expectations to navigate these situations effectively. Below, John Milikowsky, founder of Milikowsky Tax Law, offers expert advice on common queries regarding IRS audits. 1. The Necessity of Providing Bank Statements to the IRS When faced with an IRS audit, whether for an individual or a company, it’s imperative to provide all requested documentation, including bank statements. If the IRS audits your company and you are a significant shar ..read more

Facing an EDD audit can be a nerve-wracking experience for any business owner. With potential assessments and disputes looming, it’s crucial to approach the process with preparation and strategic insight.  John Milikowsky,  CEO and Founder of Milikowsky Tax Law, dives into the secrets of EDD audit strategies and triggers below: In this comprehensive guide, we’ll uncover insider secrets and proven strategies to help you navigate EDD audits effectively in 2024 and beyond. Understanding the EDD Audit Process Before delving into specific strategies, let’s briefly outline the EDD audit ..read more

Navigating tax season can be a nerve-wracking experience, especially for those wary of catching the eye of the IRS. But fear not! By understanding common triggers for IRS audits and taking proactive steps to address them, you can minimize your risk and ensure a smoother tax-filing process.  John Milikowsky,  CEO and Founder of Milikowsky Tax Law, discusses key triggers for IRS audits in 2024: Here, we’ll delve into several ways individuals and businesses might inadvertently attract IRS scrutiny. 1. Failure to Report Taxable Transactions The first surefire way to attract IRS scruti ..read more

Until September 2nd, 2020, CA EDD auditors had put audit cases on hold in order to assist the agency with the unemployment insurance benefits process.  With the onset of the COVID-19 layoffs and the increase in administrative requirements that brought, California EDD did not have enough manpower to complete and process the millions of UI claims. Some business owners who had audits in progress were received of the investigation process for months during this time.  No more.  For business owners with EDD audits of their payroll and 1099 contractors whose audits were suspende ..read more

The Internal Revenue Service (IRS) is ushering in a wave of improvements designed to empower small business taxpayers. These changes, set to enhance phone service, in-person interactions, and online options, aim to provide seamless assistance tailored to the unique needs of small businesses. Let’s take a look. The Catalyst: Inflation Reduction Act (IRA) The driving force behind these forthcoming enhancements is the Inflation Reduction Act (IRA), enacted in August 2022. The IRS’s Strategic Operating Plan outlines the strategic utilization of IRA funds to elevate customer service and address ot ..read more

Recently, businesses have experienced an increase in inquiries from the Small Business Administration (SBA) regarding the forgiveness of Paycheck Protection Program (PPP) loans that were previously forgiven. This raises a critical question: Can the SBA go back and retract forgiveness on a PPP loan that is already forgiven? The answer: Yes, the SBA has the authority to go back and retract forgiveness on a PPP loan that was previously forgiven. This process has become more prevalent, with numerous requests for loan re-examination and re-auditing, especially from 2021 onwards. John Milikowsky, F ..read more

Fun fact: Our CEO and founder, John Milikowsky, has done both! Let’s see what he thinks. IRS Audits IRS audits – No kidding, they’re not fun, no matter who it is. John notes “When I helped relatives through them, the pain isn’t the auditor being mean; it’s the infinite information they need. They start with six items and then ask for everything. Bank statements, receipts, every number’s substantiation becomes crucial. And if your records aren’t perfect, recreating numbers two years later during an audit is a challenge.” No one has flawless records; even big hotels or manufacturers struggle. T ..read more

As tax season approaches, collaborating effectively with your CPA can significantly impact your financial outcomes. Ensuring the accuracy of deductions is paramount. Here’s how to oversee and confirm your CPA’s tax deduction strategies: 1. Open Communication: Establish a clear line of communication with your CPA. Express your financial goals and inquire about their approach to deductions. Discussing these aspects openly can offer insights into their strategy and help align their practices with your objectives. 2. Comprehensive Documentation: Compile and organize all relevant financial documen ..read more