Unemployment Tax Audit

[Brian EA]

Client received an audit request from the State of Florida in regards to Unemployment tax. The S Corp has 2 employees who were paid 14k and 12k. FL unemployment tax is based on the first $7000 and they have exceeded this amount.
Does any tax Pro in Florida have any experience in this kind of audit. What are they really looking for.

brian

[newbie]

Not from Florida

but often the state is checking to make sure that there really are only two employee's and not miscatagorized subcontractors that really are employees.

[Jiggers]

In Texas they are looking for those that are "misclassified" as "contract labor". Usually undocumented workers.

Texas doesn't care if they don't have a SS number. They will reclassify them as employees and assess the tax on them. Then share the information with the IRS which is even a bigger headache!

The audit in Texas requires a detailed general ledger for the year in audit. Or the bank statements if the taxpayer doesn't use a computer.

[ChEAr$]

but often the state is checking to make sure that there really are only two employee's and not miscatagorized subcontractors that really are employees.

,and also to fill their quota for the year. (grin