The statement that you can get audited by entities other than the IRS is so true. I got audited by the CA EDD for my small business (3 family employee operation). The process took 18 months, at least 150 hours of my time, $5000 for my accountant and an additional assessment of $14.28, inclusive of interest and penalties. If they would have offered to settle for $5000 at the outset (even though I owed zero), I would have taken it.
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