Prior to reporting any unclaimed property to the States, a formal set of standard reporting procedures should be developed and followed including:
1) Identify and track all unclaimed property. 2) Set up Liability Account/Spread sheet of all identified unclaimed properties. 3) Calculate correct State dormancy periods. (most cases 1,3 or 5 years) 4) Determine if any property may be exempt from State reporting. 5) Mail out State required Due Diligence/Search letters during State mandated time frames. 6) Prepare State reports in proper State formats. 7) Submit reports & remittance to the appropriate State, normally thru the State website portal. 8) Update records, including Liability account. 9) Enjoy a cup of coffee, until next year!
– Apply for and receive approval for enrollment into the program from the VCP State. – Complete any formal educational/training given by the State, if any. – Review your books and records for unclaimed property. – Preform and complete Holder required Due Diligence Mailings. – Submit a preliminary “Notice” report to the State. If approved: – Submit a final “Remit” report to the State along with any remittance.
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 410.303.5510
How to Successfully Complete the Voluntary Compliance Process (“VCP”): March 3rd, 2025peaccadmin
– Corporate structure – Current and previous Chart of Accounts – Review of Accounts that May Hold Uncashed Property – Review of General Leger Trial Balances – Any previous State unclaimed property reports. – Any past audit reports & results – Outstanding check listing of all disbursement accounts – Accounts Receivables aging report – Journal entries related to write-offs and any details – Descriptions and any contracts related to any third-party administrators – Any mergers & acquisitions reports and detail
When it comes to submitting your unclaimed property reports, there are a myriad of State Reporting Unclaimed Property due dates including what are considered Spring States and Fall States.
Also keep in mind that, depending on the Holder type, that will also dictate when the report is due.
Most Life Insurance Companies have reports due in the Spring.
– 41 States are considered Fall Reporting, with reports due to them by October 31st/November 1st.
– 9 States have a Spring reporting deadline between March 1st and July 1st. Delaware New York Connecticut Pennsylvania Florida Illinois Vermont Michigan Texas
– The above list also includes a couple of States that have reports due over the Summer/July 1st (Michigan & Texas).
– California has a preliminary report due by October 31 each year with their remittance report due in to them between the following June 1st – June 15th. The State will notify the Holder the exact final due date.
– Puerto Rico has a preliminary report due date of August 10th and the remittance report is due to the State by December 10th each year.
– Please note, the dormancy periods vary from one, three or five years amongst the States, depending on the property type. With a one year dormancy period being for Wages, Payroll or Salary. Traveler Checks have a 15 year dormancy period.
As you can see, there are an abundance of stipulations and requirements regarding unclaimed property reporting compliance. For how to navigate the reporting due date requirements, feel free to reach out to PEACC at 410.303.5510 or email us at info@peacc.com
Call PEACC for Compliance 410.303.5510
The Ins & Outs of State Reporting Unclaimed Property Due Dates February 17th, 2025peaccadmin
– 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 410.303.5510
TYPES OF UNCLAIMED PROPERTY AUDITS & REVIEWS February 4th, 2025peaccadmin
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.
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.
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 410.303.5510
How States are increasing enforcement and compliance with the State Unclaimed Property laws and regulations January 23rd, 2025peaccadmin
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