The Long and Winding Road of Advocacy
By Joyce Cheng, EA, Advocacy & Governance Manager
In 2019, an Enrolled Agent who worked at a law firm was frequently frustrated by the impact of a very short five-day holding period for EDD bank levies. The hold is the length of time the bank can wait before it must turn over the taxpayer’s funds to EDD. Banks must notify account holders of the levy received, and usually include how much will be remitted to EDD. However, banks are not going to risk being liable for the tax if they fail to timely respond to the EDD levy.
This can, and often does, result in the funds being remitted to EDD before the taxpayer is even aware there is a levy. Five days is incredibly short for the taxpayer, when you think about a bank receiving a levy on a Friday and having to be remitted by Tuesday. Administratively, there is very little a practitioner can do once the taxpayer contacts the practitioner. Once the funds are sent to EDD, there is a very steep mountain to climb to get funds back.
As 2019-2020 CSEA President and a long-term legislative affairs enthusiast, that EA was keenly aware of the connections that could be made through CSEA (STALM, Stern/Mulak Legislative Week, etc.). In fact, she approached the EDD Director of Collections at a STALM meeting and discussed the issue of the five-day waiting period for banks to remit funds. The EA explained that FTB allows 10 days, and IRS 21 days, and that the five-day hold for EDD levies does not leave much time to deal with the levy before taxpayers lose their funds.
The Director agreed that EDD should align with the policy of its sister organization. The EA’s employer gave her the opportunity to collaborate with two attorneys in authoring and defending a delegation paper on this subject. That paper was presented to the California State Bar in Sacramento in October 2019. EDD officials present at that meeting supported the proposal.
Fast-forward to March 2023. The EDD Deputy Director of Legislative Affairs contacted the authors of that delegation paper to inform them that the matter had been acted upon and was currently before the legislature as AB 1389
. This bill would replace the existing five-day hold with a hold of 10-14 days. CSEA continued to work with the Deputy Director to remove obstacles to the bill’s implementation. AB 1389 will hopefully make it over the finish line, and if it does, CSEA can share in the win!