Delaware Announces New SOS VDA Outreach
On February 19th, the Delaware VDA Administrator sent an email to True Partners Consulting and other holder advocates that the Delaware Secretary of State’s (“SOS”) Office will be mailing over 100 letters to various companies that have been identified as likely being out of compliance with Delaware’s unclaimed property statutes.
The email explained that pursuant to its state laws, Delaware cannot initiate new unclaimed property audits unless the SOS first notifies a company in writing that it has the option to enter into the SOS’ Unclaimed Property Voluntary Disclosure Agreement Program (“SOS VDA Program”). The letters sent by the SOS strongly encourage companies to participate in the SOS VDA Program, and notify the companies that if they fail to do so, the Delaware Department of Finance will issue an audit notice 60 days after the date the letter was mailed to the company.
In most cases, a company will benefit by entering into the SOS VDA Program versus an audit for the simple reason that Delaware is required by statute to assess interest on audit assessments at 0.5% per month, with an interest cap of 50% of the amount of the underlying property required to be paid. While Delaware has the option to waive up to 50% of the interest assessment, the best-case scenario for most companies under audit is a 25% interest assessment on the overall audit findings.
What your company should do:
- BE ON THE LOOKOUT. Notify your team that invitations for the SOS VDA Program may be coming. The invitations are often sent to corporate officers or others that may not be aware of what they are or the potential consequences of ignoring the invitation.
- REVIEW YOUR OPTIONS. If you receive an invitation, assess your options carefully. Most companies will benefit by entering into the SOS VDA Program, but each company’s facts and circumstances are unique. In most cases, a company will benefit from speaking to counsel or holder advocates familiar unclaimed property.
- RESPOND PROMPTLY. If you have determined that the SOS VDA Program is right for your company, make sure to respond timely to ensure your right to participate.
We have helped hundreds of organizations determine the right thing to do when presented with these options and stand ready to discuss it with you at any time. Please reach out to the members of the True Partners Consulting Unclaimed Property Management Team to set up a call.