2026 Summary
As we transition into 2026, state-level enforcement of Unclaimed Property (UP) laws has reached a critical point. Following the aggressive expansion of auditing efforts in late 2025, the regulatory environment is characterized by increased specialization, third-party oversight, and a “no-exit” approach to voluntary compliance. Organizations must prioritize the formalization of their internal procedures to mitigate significant financial and legal exposure.
I. Enforcement Trends & Market Landscape
The landscape of unclaimed property is no longer a secondary administrative concern; it has become a “state compliance battleground.”
- Sustained Enforcement Growth: The momentum gained in the second half of 2025 will carry through 2026 and beyond. States are no longer just looking for major corporations but are increasingly specialized in targeting middle-market organizations across all sectors.
- Third-Party Auditor Integration: Enforcement efforts are frequently outsourced to third-party auditing firms. These firms often operate on a contingency basis, providing a strong financial incentive to conduct deep, multi-year investigations into a Holder’s historical records.
- Data-Driven Targeting: States are utilizing more sophisticated data-sharing techniques between tax authorities and state controllers to identify non-filers or organizations with inconsistent reporting histories.
II. Audit Specifics & Operational Requirements
The rise in state-mandated compliance reviews and self-audits places a heavy administrative burden on internal IT and accounting teams.
- The Self-Audit Rise: “Invitations” to participate in self-audits are becoming more common. While they appear less confrontational than a full audit, they are legally significant.
- Strict Compliance Windows: Organizations typically have a narrow window (usually 90 to 180 days) to complete a self-audit. Failure to respond or provide a sufficient review can immediately trigger a full, involuntary third-party audit.
- Policies & Procedures Mandate: Auditors now routinely demand a written copy of the Holder’s Unclaimed Property Policies & Procedures. This document must detail how the organization identifies, tracks, and remits property, as well as its “Due Diligence” mailing protocols.
III. Voluntary Compliance Programs (VCP)
VCPs offer a pathway to mitigate penalties, but they come with permanent commitments.
- Increased Outreach: Throughout 2026, states will expand outreach for Voluntary Compliance Programs (VCPs). These programs often offer the benefit of waiving interest and penalties for past-due property.
- No Release Provision: It is critical to understand that once a Holder is successfully entered into a VCP, there is no release from the process. Organizations must see the process through to completion, which often involves a 10-year lookback period and mandatory staff training.
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
