What Constitutes Intangible Unclaimed Property Reportable Under the Law?

Have you ever forgotten about an old gift card or a check tucked away in a drawer? Businesses deal with similar situations all the time. Unclaimed property refers to intangible assets – things like checks, credits, or refunds – that haven’t seen activity from the rightful owner for a set period called the “dormancy period.” After this time, the property becomes dormant or unclaimed.

Examples of intangible unclaimed property include:
-Uncashed payroll or commission checks
-Uncashed accounts payable/vendor checks
-Accounts receivable credit balances
-Gift certificates/gift cards
-Customer merchandise credits, layaways, deposits, refunds or rebates
-Overpayments/unidentified remittances
-Suspense accounts -Unused/outstanding benefits (non-ERISA)
-Goods received but not invoiced
-Miscellaneous income/bad debt expense accounts

Dormancy periods typically range from 3 to 5 years, but this can vary depending on the type of property. For instance, some states might have shorter periods for perishable items like gift certificates.

There are some general ranges to keep in mind:

  • Typical dormancy periods: Commonly range from 3 to 5 years for things like bank accounts, checks, and credit balances.
  • Some exceptions: Certain property types might have longer or shorter dormancy periods.

Here are some resources that can help you find specific dormancy periods:

  • National Association of Unclaimed Property Administrators (NAUPA): This site has links to each state’s unclaimed property website.
  • Unclaimed.org: Unclaimed Property Law This website allows you to search for unclaimed property by state.

Also visit our About Us page for more information or call 410-303-5510.

By understanding and complying with unclaimed property laws, you can avoid potential headaches. Not only does it prevent legal issues, but it also helps reunite rightful owners with their forgotten assets.

Once you understand the property types, the dormancy periods, and the different laws of each state, leave the compliance and reporting work to us.  You owe it to yourself and your company to contact PEACC to help alleviate all your unclaimed property compliance reporting headaches.

Where Do I Report My Unclaimed Property?

1) Unclaimed intangible property is required to be reported to the State of the property Owner’s last known address as reflected on the Holder’s books and records;
2) Unclaimed intangible property is required to be reported to the Holder’s State of Incorporation if the Owner’s address is unknown, in a foreign Country, or in a State that exempts the property type.

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California Decides Against Amnesty

The California State Controller’s Office (“SCO”) has been researching options for increasing Holder compliance to their unclaimed property reporting requirements for about a year. One of the options was to offer Holders an Amnesty Period that would waive any interest or penalties on any property reported past due. Numerous years ago the State offered the same type of Amnesty Period and it produced a major windfall of property revenue for the State.

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Delaware VDA Opportunity Notification Letters

The State of Delaware has recently initiated a major unclaimed property enforcement effort by mailing Voluntary Disclosure Agreement (VDA) opportunity letters to hundreds of Delaware-incorporated companies nationwide.

  1. 60-Day Deadline is Critical: Companies receiving a VDA letter have only 60 days to formally respond and enter the program.

  2. Failure to Respond = Audit: Companies that do not respond within 60 days will be immediately referred to the Delaware Department of Finance for a mandatory unclaimed property audit, often conducted by aggressive, third-party, contingency-fee auditors.

  3. Best Practice Alert: All mailrooms and relevant personnel must be notified to actively look for official correspondence from the State of Delaware regarding this VDA program.

  4. Proactive Compliance: Even if your company has not received a letter, as a Delaware-incorporated entity, it is a critical “best practice” to immediately review your unclaimed property compliance and reporting status to mitigate audit risk, as the State is poised to aggressively enforce its requirements.

For further information about this Delaware VDA letter writing campaign or the State’s VDA program and its benefits, please contact PEACC.com at 410.303.5510 for a free confidential consultation.

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