Help please! Sent a penalty charge, but I never got the business started!

[agw503]

CA EDD sent me a notice that I owe them $3600 in tax and $1700 in penalty.

I was planning to open up a food truck last year, but never managed to hire anyone, purchase or sell any goods.

When I was setting up an account with EDD, I went through their online program and submitted my estimates (# of future employees, estimated gross sales, etc..) I needed a business license to file for permits, but never utilized them.

I tried calling their office, but I'm just led into a jumble of automated prompts.

I spent all of last year just planning on this business venture, never made any money from it, and was just eating through my life savings. I sent them the form to close the business entity down, but they still assume that my business is still up and running. I got as far as purchasing a used food truck, but sold it 2 months later. It was never on the street, just holed up in a warehouse.

Why am I being charged an "Employment Tax" with penalties and interest totaling $5,463?

Thanks for any advice you can give.

 

[OHRoadwarrior]

When you get a business license, they expect a business return and quarterly payments. A simple phone call to the tax dept and cancelling the license should suffice for them to remove the imputed tax..

 

[davew128]

When you get a business license, they expect a business return and quarterly payments. A simple phone call to the tax dept and cancelling the license should suffice for them to remove the imputed tax..

No its not. EDD expects a certain amount of income based on the nature of the license, and since nobody bothered to file the required employment returns, this is their way of either getting money or making the OP file the return. A phone call will yield nothing except an explanation that a return for the unfiled periods will resolve the matter.

 

[OHRoadwarrior]

I am speaking from the experience of the same thing happening in a different state.

 

[davew128]

I am speaking from the experience of the same thing happening in a different state.

And I am speaking from experience in dealing with the EDD. They aren't like other state agencies.

 

[OHRoadwarrior]

That was why I wanted to clarify our backgrounds. In this case, Daves advice is more accurate OP.