So if you can't reach a resolution in a payroll tax audit you have essentially three options. The first option is to deal with the auditor and their manager. Oftentimes this can be problematic. Obviously this depends on the two people that are involved and people are people. Like any other organization, you get good people and you get bad people so depending on the relationship with the auditor that's been developed during the course of the audit and depending on the relationship of the manager, it's going to change the dynamic on how things are resolved at that level. Going to the manager is always an option. Generally speaking, the audit manager is going to back their auditor's determination. It's not like the manager is going to sit there and throw the auditor under the bus. The purpose of bringing in the manager is you get somebody more senior. You get somebody who usually is a former auditor but who has exposure to dealing with these issues and can often resolve tensions if they popped up in the audit process by being kind of a third party representative for the government to come in and resolve the situation. The managers don't really like dealing with these issues. They would rather their auditor deal with these issues and not go to the manager but there is a possibility. Above the manager of the EDD level, you also have the head of the audit division.

So the way the EDD appeals process works is like this. Essentially what you're doing is you're going in for a mini trial. You'll sit at a conference room table, you'll be on one side, they'll be on the other side and you'll have a hearing officer who is usually the new industry law judge. The judge will swear the parties and the EDD will present their side of the case first. The auditor is generally called as a witness and then you go back and forth. The EDD gets a chance to examine their witness, the opposing attorney usually gets a chance to cross-examine, we call our witnesses, they cross-examine and vice versa and then eventually after the proceeding is over, after all the evidence is presented, the judge will make a decision. They usually issue it in about three months time and they'll issue a formal written decision on the matter. So that's what the appeals process is like. There are a lot of tactical considerations going into the appeals process. The first thing to consider is appeals of the EDD level is generally really backed up. You can take several years to get through it all. There's a lot of factors that go into it but if you're having a dispute during the course of the audit, going to EDD appeals is always an option for you. The other thing potentially to do is if you file an appeal and at least state your intent to go into EDD Appeals, you can continue to work with the district and/or PD the attorney who's going to be involved in this case and try to negotiate a pre-trial resolution. Again depending on who the parties are involved, and depending on the factual circumstances, that might be a good way to go. We've had some benefit in trying to leverage things before trial so I'd recommend at least exploring that as an option or at least crossing it off if it's not a viable option and then kind of going for them. But that's generally how the appeals process works if you go through EDD appeals.