Delaware unclaimed property VDA program to close Sept. 30, 2014
TAX ALERT |
Delaware unclaimed property holders have until Sept. 30, 2014, to enroll in the state’s unclaimed property voluntary disclosure (VDA) program. The current program, originally slated to close on June 30, 2014, was extended at the last minute when Delaware Governor Jack Markell signed into law Senate Bill 228. This bill also extended the deadline to make payment (or enter into a payment plan) from June 30, 2015, to June 30, 2016, and extended the period of time during which the State Escheator is prevented from auditing a holder that enters into a VDA through July 1, 2016.
The benefits the VDA program, which is administered by the Secretary of State rather than the State Escheator, remain unchanged by the enactment of Senate Bill 228. VDA participants continue to be eligible for a limited lookback period to 1993 and the elimination of penalties and interest. Holders that do not participate may be subject to a lookback period to 1981 under audit, and may face penalties and interest.
In addition to extending VDA deadlines and continuing VDA benefits, Senate Bill 228 changed the penalty for failing to file an unclaimed property report from 5 percent per month to the lesser of 5 percent per month or $100 per day. Moreover, the legislation changed the maximum penalty from 50 percent of the amount required to be shown on the report to $5,000. The law eliminated the assessment of interest on outstanding unpaid amounts and codified the long-standing practice of the Department of Finance and the Secretary of State to treat as confidential the financial information obtained from holders during the course of examinations, settlements and voluntary disclosures.
The VDA program provides substantial benefits for holders that are out of compliance with the Delaware unclaimed property laws, and the cost of non-participation can be high. Companies that hold Delaware unclaimed property should review their compliance history and act quickly to take advantage of the Delaware VDA program benefits.