Ever wonder how your company was selected for the dreaded unclaimed property audit, or why you were selected? The states have gotten very creative when it comes to the selection process. Below are a few ways on how your company can fall victim to one.
- The State Unclaimed Property Audit – a single state, or two performs the audit. This way the expenses and resources of doing the audit are shared, saving the state(s) money.
- The Reciprocal Audit – One state conducts the audit on behalf of other state(s).
- 3rd Party Auditing Firms – these are auditing firms that have contracts with various states to conduct unclaimed property audits on behalf of the states. In some cases, these firms are paid on a contingency fee basis, meaning the firms receive a percentage of what they uncover.
- Telephone Audits (Phone Survey) – A state will contact the holder, via a telephone call, with a list of questions regarding their unclaimed property compliance. Then listen for uncertainties or inconsistencies in their response to determine if they make be a good candidate to undergo an audit.
- Highway Audits – State employees look for billboards, trucks or in newspapers to select audit candidates.
- Self-Audits – A state will contact a holder via a letter offering the holder the chance to participate in a Voluntary Disclosure Agreement (VDA). This may negate the threat of any fines or interest penalties for any past due property.
The holder may also decide to come forward voluntarily and participate in a VDA as well.
For more information contact us at PEACC.com. Please contact the professionals at PEACC at 410.303.5510, to discuss how to respond and how to proceed.