This information will assist you when preparing for an Unemployment Insurance Audit. The FAQs will let you know what to expect during and after the audit.
What to do when I receive a notification of audit letter?
Upon receipt of the notification of audit letter, please contact the Auditor to confirm your phone number, audit location, and the audit date. If, on the date scheduled, you are unable to make available the records requested, the Auditor will reschedule the audit.
Where will the audit be conducted?
The audit will be conducted where your records are located. Normally this is at your place of business. If necessary, the audit may be conducted at your bookkeeper, attorney, or accountant’s office. Also, you may bring the records to the auditor’s office.
Do I have to be present at the time of the audit?
No, the Auditor can meet with a designated representative (a Power of Attorney may be required). If you prefer the Auditor to speak directly with your representative, please contact the Auditor and provide the individual’s name, address, and telephone number.
How long will the audit take?
The length of the audit will vary, depending on the number of employees, the condition of the records, and any questions/issues that are raised. Audits are typically concluded the same day; however, the examination may take longer.
What happens when the Auditor arrives?
Prior to examining the records, the auditor will interview you or your representative to determine the nature of the business, the type of service performed and to verify the ownership of the company. The pre-audit interview also helps the Auditor to better understand the records he/she is examining, as well as give you an opportunity to ask questions.
The records necessary for the audit will be listed in the Notification of Audit Letter. The Division understands that not all employers maintain all of the records listed, but please have available those records maintained.
Why is the Auditor examining the requested records?
The purpose of the audit is to verify the wages reported for your workers are accurate, to verify you have filed all the appropriate reports, and to verify that the information associated with your UI account is correct.
How many years will be audited?
Typically the audit will cover one calendar year; however, the timeframe may be expanded based on the audit findings. If an expansion is necessary, the Auditor will provide an explanation.
When can I expect to hear the audit findings?
There will be a post-audit interview as soon as the audit is completed. At the post-audit interview, you will be given an Audit Report. The Auditor will explain the audit results. If the audit is not concluded before leaving your place of business, the Auditor will contact you at a later date to discuss the findings.
What happens if it is determined that I owe tax, interest, and penalty?
At your discretion, payment can be submitted to the Auditor at the time the audit is concluded. However, if you are unable to pay immediately, a payment plan can be arranged.
What if I do not agree with the audit findings?
If you do not agree with the changes, you have the right to appeal the audit findings upon receipt of the Liability of Determination. If you choose to appeal, you have 20 calendar days from the Date Mailed on the Liability Determination. Your appeal must be in writing and should list the reason(s) you disagree with the Division’s findings. To appeal, follow the instructions under Appeal Rights on the Liability Determination.
Does an appeal stop interest from accruing on the balance owed?
No, the interest will continue to accrue. However, you can opt to pay the balance in full. If you prevail at the hearing, you will be issued a refund.
Colorado Department of Labor and Employment
Unemployment Insurance Employer Services, Audits
P.O. Box 46538
Denver, CO 80201
(303) 318-9100, Option 4
Fax: (303) 318-8189