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IRS 940 Unemployment Tax Audit

This page provides a clear, factual overview of what a IRS 940 Unemployment Tax Audit involves, why organizations receive it, how risk is evaluated, and the typical steps required to resolve it. These insights are based on patterns seen across Gig platforms, logistics, field services and common issues identified in audits.


Agency
EDD
Location
New York
Issue Type
Missing payroll documentation
Risk Level
Medium
Common Reason
Improper contractor classification
Penalty
Back taxes and penalties
Fix Action
Submit corrected W-2 and 1099 forms
Year Range
4 years
Industry Examples
Gig platforms, logistics, field services

How TCWGlobal Helps Companies Facing a IRS 940 Unemployment Tax Audit

Letters like the IRS 940 Unemployment Tax Audit often occur when organizations experience gaps in documentation, worker classification, onboarding processes, or payroll reporting. These issues become more common as companies scale, work with more contractors, or manage projects across multiple states and agencies.

TCWGlobal helps by supporting compliant payrolling for workers you already sourced, centralizing documentation, maintaining accurate worker records, and ensuring onboarding and reporting remain consistent across all projects and departments.

For industries like Gig platforms, logistics, field services, where audits related to Missing payroll documentation commonly appear, our team reduces risk by helping clients maintain clean worker files, correct classification, and auditable payroll data.

When issues arise, TCWGlobal supports you in preparing required documentation, correcting records, and implementing processes that help prevent future EDD assessments or penalties.

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Payrolling vs Temp Staffing

Third-party payrolling is a cost-effective alternative to traditional staffing. You hire your own workers and avoid agency markups while TCWGlobal manages payroll, taxes, benefits, and compliance. This approach keeps costs low, ensures smooth administration, and maximizes savings.