True Partners Insights

Pillar Icon

5 Steps to Wrap Up Fall Unclaimed Property Compliance

By: Cathleen A. Bucholtz Jim Sadik Steven Swaigenbaum Robert M. Tucci Troy R. Wangen |

The Fall unclaimed property (UP) compliance reporting cycle has concluded, you may think you’re done since the reports and remittances have been submitted for the October 31/November 1 state deadlines.  However, here are five important action items to consider for wrapping up and getting ready for the next reporting cycle:

  1. Update Your Records.

If you have not done so already, update your records to reflect which properties were reported, resolved through due diligence, or exempted from reporting.  This will ensure that the properties are not inadvertently reported or refunded to the payee again in the future.  Additionally, if your company is ever selected for a UP audit, it will be important to be able to show in your records why certain properties were not reported. For example, your records should contain information related to what types of exemptions were taken and what types of due diligence responses were received.

  1. Retain Copies of Reports.

It is important to retain copies of all UP reports (both positive and negative) submitted to the states, inclusive of all applicable state forms, reported property detail, electronic upload confirmations, and check and EFT payments made to the states.  If you are selected for an UP audit or need to enter into a voluntary disclosure agreement (VDA) in the future, such files are required to prove that properties have been reported.  These records should be maintained for a minimum of 15 years as UP record retention rules do not adhere to IRS record retention requirements and many states look at property dated back 10 years plus dormancy, which is often 3 or 5 years depending on the state and property type.  Although you may think that the states should have complete records of your companies prior reporting history, you should proceed with the assumption that the states will not have any records and will rely solely on the holder to provide them.

  1. Retain Copies of Due Diligence Responses.

In addition to retaining copies of UP reports, it is important to retain copies of due diligence responses received, as well as proof that checks cleared as a result of issuing due diligence claim payments.  Copies of due diligence responses can also be used to prove that an amount was not owed or previously resolved with the payee, should you need to prove the disposition in the case of an UP audit or VDA.

  1. Debrief.

While it is fresh in your mind, you should schedule a debrief discussion with those involved in the UP process.  Topics for discussion may include:  What went well throughout the process?  What have you have you learned that you can take forward?  What can be improved upon and how?  Having these discussions now can help you handle the upcoming reporting cycles more effectively and efficiently.

  1. Prepare for the Next Reporting Cycle.

Although the Fall reporting cycle recently ended, it is not too early to begin preparations for the upcoming Spring reporting cycle.  Begin reviewing your timeline for action items and next steps.  Also keep in mind that the data review and gathering process can take time, especially when third-party administrators may be involved, so you should begin to determine if additional data is needed for the upcoming cycle and request the data from the applicable parties as soon as possible.

We have helped hundreds of organizations with their UP compliance needs, and we are available to assist your company as well.  Other UP services that our team can help your company with include reviewing and creating policies and procedures, voluntary disclosure programs, audit defense, exposure quantification and analysis, merger and acquisition due diligence, and gift card and stored value card consulting.

If you are interested in learning about how we can help, please reach out to the members of the True Partners Consulting Unclaimed Property Management Team to set up a call.