CA EDD Audit Question

[rfk]

Do not know the exact circumstances at this juncture, but I may have a potential client who had a corporation running a mortgage business (inactive now). CA EDD wants to do an audit of his supposed independent contractors vs. employees status.

My thought is that loan agents are usually independent contractors and not employees. Does any one have any thoughts on how to handle this if the client comes to see me and needs help with preparation for a CA EDD audit? I mentioned that having contracts with each person was step one, but I believe he did not do this -- strike one.

Thanks.

rfk

[RLymanC]

CA realestate agents

are treated as independent contractors. If infact they were just using the brokers office to service there clients, and were not controlled in any way, and split commisions with the owner, etc, etc. you may have a case. It all depends on how the broker ran the business.

Checking out the below Web site may help.

http://www.irs.gov/govt/fslg/article/0,,id=110344,00.html

[Zee]

You might want to read this link which indicates loan agents are employees. It's kinda old though...so be sure to check to see if it's outdated, or not.

http://www.wwlaw.com/tamik.htm

[S T]

Calif EDD

Calif EDD will do everything in their power to convert an independent contractor to an employee, to collect the additional State Payroll taxes.

I know that with the construction industry, in order for that independent contractor to be EXCLUDED from payroll taxes, they MUST have a State Contractors License that can be verified.

Other industries have different criteria, however, providing the proper licensing to EDD will be key in establishing an independent contractor rather than employee of the Loan Brokerage Firm.

Loan Brokerage, I have several clients that are so called Loan Brokers or Loan Underwriters or Loan Agents and work for one Loan Brokerage Firm. For those clients, it appears that their wages are being handled correctly as a Wage or combination Wage and Commission all subject to withholding and payroll taxes. None of these clients hold a Real Estate Brokers License.

http://www.mortgagenewsdaily.com/mor...California.asp See this link for licensing in Calif.

Hope this helps

Sandy

[rfk]

Thanks

Good info

rfk