asked

I am undergoing a California EDD audit for my S-Corp, where the auditor is considering all withdrawals from my business account as wages and charging penalties. I have an S-Corp with just me as a director and sole employee/corporate officer. The audit period is from Q4-2019 to Q3-2022. I had income in 2019, no income in 2020, and income in 2021 and Q1 2022. My bylaws state that distributions are at the director's discretion. How can I reduce the penalties, and what should I do to address the auditor's concerns about distinguishing between wages and distributions?

May 10th, 2023

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