If immediate full payment is not possible and you are up to date on your tax returns and payments, contact the EDD collector and request information about instalment payments. The ESD will send you a package consisting of closing forms for individuals and companies with instructions. You can also go to the ESD website and download these forms from: www.edd.ca.gov/pdf_pub_ctr/de927b.pdf. If you do not have an assigned collector, contact the EDD Taxpayer Support Centre (888) 745-3886 or the ESD Website at www.edd.ca.gov/Pyroll_Taxes/Forms_and_Publications.htm#Forms. They may be able to help you by assigning your account to a collector who works with you. I have found that most ESD collectors are reasonable and cooperative. Sometimes it takes several weeks for them to contact you after receiving your financial statements. When submitting annual financial statements, be sure to provide ESD with the most up-to-date six-month account statements. There is a price to pay for short-term or long-term agreements: 1) interest continues to accrue and be deducted from the outstanding balance; (2) ESD may file a notice of state tax lien until the liability is paid in full. This article discusses the long-term agreement and the non-standard instalment payment agreement, as well as the documentation and information required to create any type of agreement. However, the instalment payment arrangement is not approved for taxpayers with multiple defaults and in cases of taxpayer fraud.

It is important to note that the start date of a short-term agreement is no more than 10 business days after an oral agreement is established during the conversation with an ESD employee. This means that ESD can still withdraw your potential tax refund from the state or federal as a payment of the labor tax due. Any payments from these sources will in fact be additional payments in addition to the payments that the taxpayer already makes under the instalment payment agreement. This is the second part of a two-part series that deals with the latest developments in the instalment agreements negotiated on ESD. If you or your business is liable for ESD withholding tax, you may be able to take advantage of one of the three “in place” instalment payment programs currently offered by the ESD Collection Division. These agreements are usually set up via an assigned EDD collector. The first agreement is called “Short-term agreement – Up to 12 months”. The second agreement is called a “long-term agreement – more than 12 months – up to 36 months”.

The third agreement is called a “non-standard instalment payment agreement”. If you owe more than $25,000 to ESD and need more than 12 months to pay, you may have up to 36 months or even more time, depending on your situation. A long-term agreement is usually reserved for incapacitated or inactive taxpayers. The verification portion of the tax payable can be paid in instalments for up to 18 months, and all other amounts (account balance) must comply with regular guidelines for short-term (up to 12 monthly payments) and long-term (more than 12 months) agreements. The taxpayer must indicate orally during discussions with the ESD representative or in writing to the ESD that he will pay the amount due to EDD within one year (or 18 months for an audit assessment). ESD employees or their supervisors have the authority to approve short-term instalment payment agreements without getting involved in a complicated process. If a business entering into a long-term contract is a corporation, LLC or LLP, and the remaining balance is greater than $10,000 of the total amount of tax payable that can be assessed, a Form DE 204 must be filed. DE 204 determines the liability of the persons responsible for the company with regard to the established tax liability of the company. Even if the taxpayer already somehow agrees with EDD, the terms of that agreement can be renegotiated. Long-term agreements are not as easy to obtain as short-term agreements.

When deciding on the duration of this type of agreement, the ESD will determine whether you are a “business” taxpayer. A taxpayer of the company may be granted up to twenty-four months to pay the deficit […].