Contact us:
914-715-7221
914-715-7221
| Unclaimed Property Services |
Unclaimed Property Services
In reaction to significant budget deficits, states are looking for new
revenue sources as well as stepping up enforcement of their
existing laws. One area where states have increased audit activity
in recent years is in the area of unclaimed property. States view
the enforcement of unclaimed property as a viable way of
increasing revenue without increasing taxes.
What is Unclaimed Property?
Unclaimed property is generally defined as any financial asset that
has been abandoned by its owner for an extended period of time.
Unclaimed property includes such items as uncashed checks (e.g.,
payroll, vendors), gift certificates, dormant bank accounts, stock
dividends, and other similar property. It's called unclaimed property
because the company issuing the property can not locate the
owner. States typically have laws that require the holders of
unclaimed property to make an effort to locate the owner. If the
owner cannot be located during a specified time period, known as
the dormancy period, the property is classified as abandoned.
Generally, once certain property is considered abandoned,
companies are required to report and transfer the property to
either (1) the state where the owner was last known, or (2) to the
holder's state of incorporation if the owner's last know address is
not known. Once the unclaimed property is remitted to the state,
the holder is relieved of the liability and the state becomes the
custodian - often in perpetuity.
Dormancy Period
The dormancy period is the amount of time property remains
unclaimed before it is considered abandoned. The dormancy
period is determined on a state-by-state basis and on the type of
property abandoned. For example, uncashed payroll checks are
deemed abandoned in New York State if for three successive years
the payroll checks remain uncashed or the holder has not received
any written communication from the owner during this time.
Failure to Comply with Unclaimed Property Laws
Due to the increased audit activity by various states, the likelihood
of a company chosen for an unclaimed property tax audit has
grown significantly. States, such as Delaware, are cross
referencing other required Delaware filings to determine if a
company should be filing unclaimed property returns. For example,
all companies incorporated in Delaware are required to file an
annual franchise tax return. Delaware and its auditors are using
that data base to find companies not in compliance with their
unclaimed property laws. Once a state identifies a company and
sends out an audit notice, the ability to negotiate a favorable
settlement greatly diminishes. Most states have substantial interest
and penalties for non filers. For example, Delaware imposes a
failure-to-file penalty of up to 50% of the assessment.
Many states offer a Voluntary Disclosure Agreement ("VDA") which
allows companies holding unclaimed property to report and remit
such property. There are many benefits to entering into a VDA
including potential abatement of penalties and interest and limiting
the look back period (i.e., the number of years the state will hold
the company responsible for). Typically, once a company has
been notified of an upcoming unclaimed property audit,
such company will not be eligible to enter into a VDA with
the state.
At SALT Link we provide:
For more information on how SALT Link can help you or your
clients with unclaimed property issues......call David Seiden at 914-
715-7221 or via email at djseiden@saltlink.com.
Legal Disclaimer:
The information contained on this World Wide Web site is general in nature and is not
intended to be a substitute for professional analysis or advice. You should not act or
rely on information contained on this site without seeking appropriate professional
advice. Further, the information provided on the site does not necessarily reflect the
opinions of the professionals listed in the site and there is no guarantee the
information is correct, complete or up-to-date. The links on this Web site are provided
solely to help you to locate other Internet resources that may be of interest to you.
These links do not constitute referrals or endorsements of the linked entities.
In reaction to significant budget deficits, states are looking for new
revenue sources as well as stepping up enforcement of their
existing laws. One area where states have increased audit activity
in recent years is in the area of unclaimed property. States view
the enforcement of unclaimed property as a viable way of
increasing revenue without increasing taxes.
What is Unclaimed Property?
Unclaimed property is generally defined as any financial asset that
has been abandoned by its owner for an extended period of time.
Unclaimed property includes such items as uncashed checks (e.g.,
payroll, vendors), gift certificates, dormant bank accounts, stock
dividends, and other similar property. It's called unclaimed property
because the company issuing the property can not locate the
owner. States typically have laws that require the holders of
unclaimed property to make an effort to locate the owner. If the
owner cannot be located during a specified time period, known as
the dormancy period, the property is classified as abandoned.
Generally, once certain property is considered abandoned,
companies are required to report and transfer the property to
either (1) the state where the owner was last known, or (2) to the
holder's state of incorporation if the owner's last know address is
not known. Once the unclaimed property is remitted to the state,
the holder is relieved of the liability and the state becomes the
custodian - often in perpetuity.
Dormancy Period
The dormancy period is the amount of time property remains
unclaimed before it is considered abandoned. The dormancy
period is determined on a state-by-state basis and on the type of
property abandoned. For example, uncashed payroll checks are
deemed abandoned in New York State if for three successive years
the payroll checks remain uncashed or the holder has not received
any written communication from the owner during this time.
Failure to Comply with Unclaimed Property Laws
Due to the increased audit activity by various states, the likelihood
of a company chosen for an unclaimed property tax audit has
grown significantly. States, such as Delaware, are cross
referencing other required Delaware filings to determine if a
company should be filing unclaimed property returns. For example,
all companies incorporated in Delaware are required to file an
annual franchise tax return. Delaware and its auditors are using
that data base to find companies not in compliance with their
unclaimed property laws. Once a state identifies a company and
sends out an audit notice, the ability to negotiate a favorable
settlement greatly diminishes. Most states have substantial interest
and penalties for non filers. For example, Delaware imposes a
failure-to-file penalty of up to 50% of the assessment.
Many states offer a Voluntary Disclosure Agreement ("VDA") which
allows companies holding unclaimed property to report and remit
such property. There are many benefits to entering into a VDA
including potential abatement of penalties and interest and limiting
the look back period (i.e., the number of years the state will hold
the company responsible for). Typically, once a company has
been notified of an upcoming unclaimed property audit,
such company will not be eligible to enter into a VDA with
the state.
At SALT Link we provide:
- Compliance Review - We review and provide guidance on
how to properly track and report unclaimed property on a
going forward basis. - Audit Representation - We have extensive experience in
dealing with state auditors and have assisted many clients
through the audit process. It is important for a company to
understand, on a regular basis, the position the state is
taking and what our strategy is to minimize any exposure. At
SALT Link, we pride our selves on the level of
communication we provide each of our clients. - Voluntary Disclosure Agreements ("VDA") - We
evaluate a clients potential liability and negotiate with the
state to minimize the ultimate cost to the client. We have
successfully reduced and/or eliminated fines, and penalties
resulting from many years of a companies under-reporting or
not reporting at all.
For more information on how SALT Link can help you or your
clients with unclaimed property issues......call David Seiden at 914-
715-7221 or via email at djseiden@saltlink.com.
Legal Disclaimer:
The information contained on this World Wide Web site is general in nature and is not
intended to be a substitute for professional analysis or advice. You should not act or
rely on information contained on this site without seeking appropriate professional
advice. Further, the information provided on the site does not necessarily reflect the
opinions of the professionals listed in the site and there is no guarantee the
information is correct, complete or up-to-date. The links on this Web site are provided
solely to help you to locate other Internet resources that may be of interest to you.
These links do not constitute referrals or endorsements of the linked entities.
| Unclaimed Property Resource Links |
NYS Office of the State
Comptroller
http://www.osc.state.ny.us/ouf/inde
x.htm
Comptroller
http://www.osc.state.ny.us/ouf/inde
x.htm
NJ Department of the Treasury
http://www.state.nj.us/treasury/taxat
ion/updiscl.shtml
http://www.state.nj.us/treasury/taxat
ion/updiscl.shtml
CT Office of the State Treasurer
http://www.state.ct.us/ott/aboutucp.htm
http://www.state.ct.us/ott/aboutucp.htm
Delaware Dept. of Finance
http://revenue.delaware.gov/inform
ation/Escheat.shtml
http://revenue.delaware.gov/inform
ation/Escheat.shtml
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