How Can You Be Filing Your Unclaimed Property Reports and Still Not be Compliant?

1) By using an incorrect dormancy period or cut off date.

2) By reporting all property to the wrong State or State of Incorporation.

3) By having lapses in your reporting history.

4) By not understanding the rules of customer generated contact or interest in property.

5) By failing to report all eligible property

6) By not performing the State required Due Diligence/Search Letter function.

7) Under reporting or not reporting all property types.

8) Not using the State mandated required report formats.

For further assistance with non-compliance reporting issues, please contact a professional at PEACC at 410.303.5510 or email us at info@peacc.com

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

TYPES OF UNCLAIMED PROPERTY AUDITS & REVIEWS

State Unclaimed Property Audit

    – done by individual State or can be done jointly with other State(s).

Reciprocal Audit

    – One State audits on behalf of other State(s)
    – Expenses and resources are shared

Private Audit Firms

     – State Contracts Out Third-Party Audit Firm
     – May Get Paid Based Upon a Percentage of What They Find

Telephone Audits & Reviews

     – State contacts Holder via phone.
     – Listen for uncertainties & inconsistencies in voice.

“Highway Audits”

     – State audit employees look for newspaper headlines, billboards and trucks while out of office for audit candidates.

For further information about the types of unclaimed property audits and how to navigate thru them,
please contact the experts at PEACC at 410.303.5510 or email us at info@peacc.com

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

Four Phases of the Unclaimed Property Audit Process

The Four Phases of the Unclaimed Property Audit Process include:

PHASE I
  ~ Entity & property types scoping
    –  Public information review/10k
    –  Tax Return review
    –  Analysis of general ledgers & Review of all legal entities

PHASE II
~  Quantification of Any Potential Unclaimed Property
    – Bank Accounts detail (aged trial balances review)
    – Transaction level detail (aged outstanding check listings, Accounts Receivables credit write-offs, etc.)

PHASE III
~ Research Analysis, Remediation & Due Diligence Adjustments
   – Individual Property type &  Entity exposure provided to Holder.
   – Research, Remediation and due diligence results included in final findings.

PHASE IV
~ Unclaimed Property agreed upon final report and remittance sent in to State.

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

Examples of Unclaimed Property in the Corporate World

– Vendor or Accounts Payable Checks
– Payroll Checks or Denied Automatic Payments/Direct Deposits
– Refunds/Rebates
– Account Receivables/Credit Balances
– Customer Overpayments
– Unapplied Cash
– Unredeemed Gift Certificates
– Dormant Back Accounts (Checking/Savings Accounts)
– Life Insurance Proceeds Due
– Uncashed Benefit Checks

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

What Is Unclaimed Property?

Unclaimed property in the corporate world typically refers to intangible property and are funds owed to another party that have remained unclaimed or uncashed for a specific time period. Normally a period of
one, three or five years, known as the dormancy period. After this dormancy period expires, the property is required to be reported and remitted to the Owner’s State of last know address or State of Incorporation if the address is unknown.
– The property must be fixed and under certain legal obligations.
– The States take custody of these unclaimed funds and hold the property until the rightful Owner comes forward to claim them.
– All States have reporting requirements including D C , Guam, Puerto Rico & the Virgin Islands.
– Unclaimed Property Reporting is NOT a tax – traditional NEXUS does not apply.

Visit PEACC.com for more information.

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

How States are increasing enforcement and compliance with the State Unclaimed Property laws and regulations

How States are increasing enforcement and compliance with the State Unclaimed Property laws and regulations.

1) Mailing out of Compliance Reminder Notification letters.
    – Reminding Holders who do business in their State of their State reporting obligations
    – Mailing out Reminder letters of their reporting deadlines/due dates.

2)  Mailing out Self-Audit or Voluntary Disclosure Agreement (“VDA”) Invitation notices.
– Prior to initiating an unclaimed property audit, the State will mail the Holder an invitation to enter into a self audit or VDA program.

3) More States are establishing Voluntary Disclosure Programs (VDP’s) – Prior to starting an Audit, States will invite the Holder to Voluntary participate in a Self-Audit program or review.

4) Establishment of  State Voluntary Disclosure Programs/Agreements – Many States have developed Voluntary Disclosure Programs for Holders as an incentive to come into compliance with State laws without the threat of interest or penalties.

5) The Dreaded State Unclaimed Property Audit – A State may use State employees to conduct Unclaimed Property Audits on the State’s behalf.
–  Most States will use a third-party auditing firm, compensated on a agreed upon contingency fee. Although this contingency fee arrangement is currently frowned upon within the industry.

For further information regarding reports or unclaimed property compliance issues, please contact the professionals at PEACC by calling 410.303.5510 or email us at info@peacc.com

Call PEACC for Compliance
Call PEACC for Compliance 410.303.5510

Unique Unclaimed Property Report Due Dates

States that have a unique report due date for Holders:

REPORT DUE DATESTATE
March 1Delaware
March 10New York
March 31Connecticut
April 15Pennsylvania
April 30Florida
May 1Illinois
May 1Vermont
July 1Michigan
July 1Texas

A Holder may or may not have unclaimed property due to any of the above mentioned States. But it’s a good idea to check and see. Note: most of the dormancy periods for the above mentioned States are going to be 3 or 5 years, depending on the type of property and State. For all other States, the report due date is either in the Fall or Spring, depending on the Holder & Property type. For further information regarding reports or unclaimed property compliance issues, please contact the professionals at PEACC by calling 410.303.5510 or email us at info@peacc.com

Call PEACC for Compliance
Call PEACC for Compliance

Delaware Unclaimed Property (VDA)

Now that your fall unclaimed property reporting is complete, your PEACC Team of Advisors would like to announce Delaware is schedule to send out the next round of VDA invitations on November 15, 2024. The State last sent invitation letters out in February 2024.

If your organization receives a VDA (Voluntary Disclosure Agreement) invitation Letter from Delaware and fails to timely respond, you will become eligible for the dreaded, unclaimed property audit. Contact the professionals at PEACC to discuss your options, along with the process, at 410.303.5510.

https://lnkd.in/eTMSCMqp
VDA Invitation Dates – VDA Program – State of Delaware
vda.delaware.gov

State of Delaware map

Unclaimed Property Self-Audits: Two things to always keep in mind

When performing any unclaimed property self-audits or reviews, please keep two important givens in mind to alleviate troubles down the road:

1) Most companies will under estimate their true unclaimed property exposure if and when audited by the State(s).

2) A State will put the burden of proof on the Holder to prove they’re wrong. A State will presume a Holder is guilty unless they can be proven wrong.

For help in developing and implementing an annual unclaimed property reporting process or any questions regarding this process, please reach out to one of the Professionals at PEACC by calling 410.303.5510 or email us at info@peacc.com

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