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Preparing for Fall Unclaimed Property Compliance

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

Although the calendar still says its Summer, now’s the time to prepare for your company’s Fall unclaimed property (UP) compliance filings.  Here are seven things to remember to help you get ready for the busiest unclaimed property compliance season of the year:

  1. Due Diligence is Required

Due diligence is the process by which a company holding UP (Holder) makes an effort to resolve the item with the apparent owner of the property (Owner) prior to reporting and remitting to the jurisdiction.  Due diligence is statutorily required by EVERY jurisdiction, with strict guidelines on when a letter needs to be sent to the missing Owner notifying them that their property may be delivered to the state if not claimed.  When preparing due diligence letters, be sure to verify the correct dormancy period for each property type and the minimum dollar value (Threshold Amount) for which a letter needs to be sent for each jurisdiction.

  1. Develop a Compliance Calendar

Just like your tax filing calendars, a UP compliance timeline is critical for smooth efficient flow of processes and should govern activities for all departments and individuals involved. Since UP has various reporting periods and different due diligence letter mailing timelines depending upon the jurisdiction, a compliance calendar should capture all action steps and due dates for areas where you have reporting responsibilities.  Reach out to us for a sample compliance calendar.

  1. Know the Different Compliance Seasons

Each jurisdiction has its own UP compliance due dates. While most jurisdiction require companies to file their reports in Fall, some jurisdictions have Spring or Summer reporting periods.  California actually has two UP reporting periods – an initial report, followed by a final report and remittance in Spring.  For most corporations, the reporting seasons break out is as follows:

  • 44 Fall reporting jurisdictions – due date of Oct. 31st / Nov. 1st
  • 7 Spring reporting jurisdictions with due dates between Mar. 1st and May 1st
  • California Remit Report due between June 1st and June 15th
  • Michigan and Texas reports due July 1st

Keep in mind that different industries may have different reporting dates or requirements.  Standard Corporations, Life Insurance Companies and Banks may each have their own unique reporting due dates.  In addition, Energy Companies can have special rules that may impact what a Holder reports in some jurisdictions.  For a compliance map with the reporting information applicable to your company, contact us.

  1. Review All Potential UP

Remember, UP comes in a variety of types.  In addition to accounts payable, accounts receivable and payroll, unclaimed property can arise in association with employee benefit plans, gift cards, rebates and customer loyalty plans and other areas in your company.  Make sure that you’ve identified all your potential UP reporting obligations.

  1. The Company Information Request

Some jurisdictions are now requiring Holders to provide detailed information about their company when filing their UP report.  Some of the types of information that must be gathered and submitted along with the UP report include:

  • Total Assets, # Of Employees, Total Revenue of the Holder
  • If reporting for more than one entity, the Holder must provide statistics for each entity
  • If reporting on a consolidated basis, the Holder must provide list of entities along with above statistics for each entity
  • Holders can use their latest fiscal year or prior year information for the report
  1. Keep Track of Changing Laws

Statutes and regulations impacting UP have been undergoing significant revisions in the past few years and jurisdictions continually modify, and in some cases completely rewrite, their laws.  In addition to changes to dormancy periods, due dates and reporting requirements, there have also been the repeal of some UP reporting exemptions.  In some cases, the states have even applied the new laws retroactively, so that the initial UP reports filed under the new laws may include multiple years’ worth of property.

  1. Know HOW to File

In addition to what and when to file, Holders must make sure that they know the form and format requirements for UP reports for each jurisdiction.  While some jurisdictions still allow Holders to send CDs and paper reports to the state along with a check, many are now requiring that the report, and the payment be submitted electronically.  Make sure that you know the rules for each jurisdiction in which you are required to file to ensure that you have time to take the necessary steps to submit reports and remittances by due date.

Remember…

Navigating the uncertain terrain of UP compliance in more than 50 jurisdictions can be difficult and treacherous, but taking the time to prepare for your UP compliance obligations well before the reporting deadlines can ease your compliance burden and minimize costly mistakes.

We at True Partners Consulting have helped hundreds of organizations with their UP compliance concerns, and we are available to assist your company with all of its annual UP compliance issues or concerns.  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 more about how we can help with any of your company’s UP needs, please reach out to the members of the True Partners Consulting Unclaimed Property Management Team to set up a call.