Preparing For Your Unemployment Insurance (UI) Audit

Publication Number: UCT-8296-P

This page is based on a brochure Preparing For Your UI Audit, UCT-8296-P, (R. 11/2013), describing preparation, expectations and results of an Unemployment Insurance (UI) Audit. If you would like a copy of the brochure please contact the Audit Section.

Division of Unemployment Insurance
Bureau of Tax & Accounting (BTA)
P.O. Box 7942
Madison, WI 52707-7942

Field Audit Section
(608) 266-3180
FAX (608) 267-1400
UI Tax and Accounting Staff

Introduction
This brochure addresses the most frequently asked questions from employers who receive notice of a Wisconsin Unemployment Insurance (UI) audit. Please read this information carefully since it will assist you when preparing for the audit, let you know what to expect during and after the audit, and supply you with a contact person and telephone number if you have additional concerns.
Why was I selected for audit?
Each year, several thousand employers are selected for audit. Some employers are selected randomly from the entire list of employers covered under the Wisconsin Unemployment Insurance (UI) law. Others are selected to verify that wages are being reported correctly. In other instances employers need assistance because of changes in their business. The auditor can tell you specifically why you were selected at the time of audit.
What is the purpose of this audit?
Wisconsin UI audits are performed to verify your reported payroll and exclusions taken for UI purposes, to ensure that all employees have been properly reported, and to answer any questions you may have regarding the UI law. If you are not currently covered under Wisconsin UI law, an audit may be performed to determine if you should be a covered employer for UI purposes.
How long will this audit take?
The length of time depends on the size of the employer, the condition of the employer's records, and the number of problems encountered. If you are a small-to-medium-sized employer (1-50 employees), the field work of the audit will probably be completed in a half day or less. If you are a larger employer, the field work of the audit may take considerably longer.
What if I cannot provide records on the scheduled audit date?
If you cannot be available on the date scheduled and cannot arrange to leave the records with another person, please contact us immediately by telephone or return postcard (if provided). We will reschedule the audit if necessary. Please provide us with several alternate dates when you will be available so that rescheduling can be done promptly.
Must I be available at the time of audit?
You may designate a responsible individual to provide the records to the auditor. If possible, that individual should understand your records. However, if you must leave them with someone who is not familiar with your records, the auditor will contact you later to discuss the audit.

If you want the auditor to deal directly with your accountant, bookkeeper, or other representative, please contact the auditor by telephone or provide the name, address, and telephone number of the party on the return postcard if one was provided with the scheduling letter.
What period of time will the audit cover?
Usually the audit will cover one year unless issues are discovered that could affect other years. The scheduling letter lists the time period for which records must be provided. If the audit is not expanded beyond the one-year period, it may not be necessary for the auditor to examine all the records. However, please have all requested records available in case they are needed.
What records will the auditor examine?
The records we would like to examine are listed in the scheduling letter. Not all employers maintain all these records, but those you do maintain should be available.

Remember that Wisconsin UI law requires all employers to keep adequate records for reporting payroll (Section 108.21(1)).
Why is the auditor examining records, forms, and documents in addition to payroll records?
To verify that payroll was correctly reported for UI purposes, the auditor must look at a variety of documents and records. Payments to workers are made differently and through different accounts from employer to employer. These payments may be considered payroll for UI purposes. Thus, the auditor must look at any records that may contain payments for services or payroll information.
Can I refuse to provide records to the auditor?
Under Wisconsin law (Section 108.21(1)) you are required to provide records to the auditor for examination. If you refuse to do so, the records can be subpoenaed. If a subpoena is necessary, you will be required to pay the costs associated with service of the subpoena.
When will I know the audit results?
The auditor will discuss the results of the audit before leaving your place of business or the location at which the records are kept. If the audit is not complete at that time or you are not available, the auditor will contact you later to discuss the results. In addition, the auditor will send you a summary of proposed audit adjustments. Based on those adjustments, an Initial Determination (ID) of taxes due or credit available will be sent to you, usually within 30 days.
What if I have other questions regarding the audit?
You can contact the auditor directly at the number shown on the scheduling letter, or contact our audit support unit at (608) 266-3180. Deaf, hearing or speech impaired callers may reach us through WI TRS.
What if I don't agree with the audit results?
The ID you receive will list a contact person's name. If you wish to discuss the audit results, please call the number shown. If possible, we will resolve issues at that time. However, that may not always be possible. The ID is an appealable document. To appeal an ID, you must submit a letter to the address shown on the ID requesting a hearing and explaining your disagreement. Your appeal must be postmarked by the final appeal date indicated on the ID.
What if I consider some or all of my workers either independent contractors or subcontractors?
Under Wisconsin UI law, an individual being paid by you for work performed is presumed to be your employee unless you meet the conditions set forth under Section 108.02(12) of the Wisconsin Statutes. A copy of the "Definition of an Employee Under Wisconsin Unemployment Insurance Law" (UCT-10685), Section 108.02(12) can be obtained from the auditor or by contacting the Field Audit Section. The auditor must verify that these conditions exist for each individual you consider a subcontractor or independent contractor.
Can the auditor answer questions regarding problems I'm having with the Department of Workforce Development (DWD)?
Our auditors are well-versed in Wisconsin UI law. Therefore, they should be able to answer most questions you have on UI. If you have questions about other DWD divisions, the auditor can provide you with information on who to contact.

The Department of Workforce Development is an equal opportunity employer and service provider. If you have a disability and need to access this information in an alternative format, or need it translated to another language, please call Toll Free 1-800-494-4944 or TTY 1-888-393-8914.

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