Delaware Secretary of State letters warn of unclaimed property audits
TAX ALERT |
On Feb. 20, 2020, the Delaware Secretary of State’s (SOS) office mailed over 100 letters to companies they identified as “likely being out of compliance” with Delaware’s unclaimed property law. The letter serves as an invitation to enroll in the SOS Unclaimed Property Voluntary Disclosure Program (VDA). While participation in the SOS VDA program is strongly encouraged, holders of unclaimed property who do not enroll in the program within 60 days of the mailing will be issued an unclaimed property audit notice by the Delaware Department of Finance.
The SOS will be hosting a public webinar on March 27, 2020, at 2:00 p.m. EDT to answer commonly asked questions about unclaimed property. Questions may be submitted in advance by March 20, 2020.
Delaware remains the largest enforcer of unclaimed property laws and regulations. As one of the state’s largest sources of revenue, unclaimed property audits are quite common and very lucrative for the state. The notice gives holders little room for options – either participate in the state’s VDA Program or be audited. For holders that received the letter, it should not be ignored. It is very important that companies understand the risks and the benefits of a VDA versus an audit within the 60-day response window.
This is not the first time that the Delaware SOS has issued such letters. These mailings serve as an important reminder for all companies, especially those incorporated in Delaware, to evaluate their compliance with unclaimed property laws and regulations and proactively mitigate their unclaimed property exposure.
Businesses that receive the Delaware notice or have questions about unclaimed property and various state compliance obligations should speak to an unclaimed property specialist. For more information and insights on unclaimed property, please see RSM’s Unclaimed Property Portal.