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The primary objectives of an unemployment insurance employer tax audit are to: Ensure compliance with the taxing provisions of the Texas Administrative Code, Title 40, Part 20, Subchapter 815.106. Foster understanding by employers of the unemployment compensation law.
Specifically, auditors reviewed unemployment insurance tax payments, tax audits, abatements, complaint referral assignments, delinquent accounts, blocked claim assignments, and wage-reporting exception reports.
A TWC tax audit generally begins in one of four different ways: A former worker may file an unemployment claim. If no wages were reported for that claimant by the employer, the claim may be disallowed, in which case the claimant will probably appeal.
The scope of this audit included reviewing the implementation status of the Texas Workforce Commission’s (Commission) prior audit recommendations in An Audit of Unemployment Insurance Tax at the Texas Workforce Commission (State Auditor’s Office Report No. 11-042, July 2011).
The Commission has multiple tools in place to monitor employers for unemployment insurance tax liability. These tools include tax audits, receiving and processing complaint referrals, and generating and reviewing reports that can identify unregistered employers and wage-reporting errors.
The Texas Workforce Commission is charged with auditing businesses to ensure that employee wages are properly reported and appropriate taxes paid on such wages. If TWC rules that an employer has failed to properly report all wages and pay taxes, it will assess back taxes and interest.
This blueprint provides information on unemployment insurance (UI) tax audits and how states may select, or target, employers for audit.
