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1/13/22 7:39 AM

Mergers & Acquisitions: Consider Unclaimed Property

Merger and acquisition (“M&A”) activity is as dynamic as it ever has been even during the on-going global pandemic. The unclaimed property consequences of M&A transactions, however, tend to be an afterthought. Even when unclaimed property compliance is identified as a potential issue, it is most often only reviewed at a very high level, which may result in future problems. 

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Topics: Compliance, Reporting, Best Practices

12/22/21 9:07 AM

Twelve Do's of Unclaimed Property Due Diligence

Holders have a statutory obligation under states’ unclaimed property laws to perform a final outreach to owners of unclaimed property before reporting the property to the state, known as a due diligence mailing. This mailing is the final attempt by the holder to reach the owner, thereby putting the owner on notice that if the owner fails to respond to the holder regarding his or her property within a certain period, the holder will be required by the state to escheat the property to the state.

Due diligence requirements, including the timing of the notice, the dollar amount above which notice is required, the method of delivery and even the content of the letter varies among the states. Performing due diligence is not only an important part of a holder’s compliance obligations, but it also aligns with the goal of the unclaimed property laws, which is to reunite the owner with his or her property, and reunification also assists holders with customer retention and satisfaction.

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Topics: Compliance, Due Diligence, Reporting, Best Practices

12/20/21 8:33 AM

MarketSphere Names Tracy Olsen Vice President of Strategic Solutions

MarketSphere Unclaimed Property Specialists, provider of advanced unclaimed property managed solutions, welcomes Tracy Olsen as the company’s new Vice President of Strategic Solutions. Ms. Olsen’s vast experience in all aspects of unclaimed property compliance has led her to effectively collaborate with holders and create programs that meet the complex requirements of escheat compliance.

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11/30/21 10:25 AM

Unclaimed Property Advocates - Essential for Audit Defense Strategy

Regardless of prior escheat compliance history, an audit can be a disruptive and costly event for any organization. As states continue to increase their outreach and enforcement efforts, the number of companies subjected to audits continues to rise. Oftentimes the outcome of the audit is less about a company’s past compliance history and more about their ability to understand and defend themselves.

Companies face several issues when under audit. Many of these revolve around the varied protocols used by the states and/or their third-party auditors when conducting the audit, including individual jurisdictional auditing guidelines, varied and extensive lookback periods, and the assessment of interest and penalties.

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Topics: Compliance, Audit, Best Practices

10/25/21 7:22 AM

Considerations for First Time Filers of Unclaimed Property

Businesses (also known as holders for unclaimed property purposes) are required by law to report and remit unclaimed property to the states on an annual basis. A typical holder reporting cycle involves the following, all of which are governed by state unclaimed property laws, and all of which can vary by holder type and/or property type.

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Topics: Compliance, Reporting, Best Practices

10/4/21 10:28 AM

Update: Unclaimed Property Record Retention - What, Why, & How

Record retention refers to how long important information must be retained for future use or reference. Most financial and accounting processes have standards that need to be met because agencies such as the Internal Revenue Service, the Federal Deposit and Insurance Corporation, and the Public Company Accounting Oversight Board all have requirements. You may be familiar with the obligations for these well-known agencies. Do you know what is required for escheat compliance?

Companies generally maintain a schedule or policy for their escheat records that help define what will need to be kept and for how long. This is a worthwhile practice to meet requirements and have supporting documents available if requested or needed in the event of an audit.

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Topics: Compliance, Reporting, Best Practices

9/29/21 8:18 AM

Unclaimed Property Non-Compliance: Penalty & Interest Assessments

Unclaimed property reporting is a complex task with varying state requirements and protocols. One of the biggest fears and concerns for holders is running afoul of this complexity and creating the potential for a penalty and interest (P&I) assessment. States have the statutory authority to assess these fees and may impose them for:

Reporting late property

Filing late reports

Filing inaccurate reports

Submitting improper funding

Reports filed in an improper or incorrect format 

Most jurisdictions have some mechanism to assess penalties or interest. Below are a few examples of several high-profile states.

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Topics: Risk, Compliance, Reporting, Best Practices

9/17/21 12:44 PM

Unclaimed Property Compliance: Negative Reports Could Be Required

In any given year, holders may find that they do not have any unclaimed property to report to one or more states.  Does this mean that the holder does not have a reporting obligation to the state(s)?  Not necessarily.  Some states still require that you file a “negative” report.  This negative report indicates to the state that the holder has no property to report for the given report year, and demonstrates ongoing compliance with the state’s unclaimed property requirements.

The states are split on the matter of negative reports, so it is important to check with the state(s) in question before filing. Failure to submit a negative report if one is required by the state will cause the holder to be considered out of compliance. Other states do not require negative reports but will accept them if they are filed., and a handful of states do not accept negative reports at all. 

The examples below help to illustrate the variation in negative reporting requirements across the states:

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Topics: Compliance, Reporting, Best Practices

9/9/21 10:19 AM

Preparing for Fall Unclaimed Property Reporting 2021

Fall unclaimed property reporting season is upon us, and most holders are gearing up to meet many of the states’ October 31/November 1 reporting deadline. It is essential that holders track and monitor state unclaimed property legislation to follow any new requirements, which often lead to changes to the states’ reporting instructions. State websites and holder manuals contain key information related to these changes, as well as the actual mechanics of reporting and remitting unclaimed property. Be sure to review these updates prior to each reporting cycle and refamiliarize yourself with state requirements as these vary from state to state. A high-level review of holders annual compliance reporting obligations are outlined below.

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Topics: Compliance, Reporting, Best Practices

8/24/21 9:13 AM

How to Merge Unclaimed Property with Other Duties

It can be difficult to smoothly add abandoned and unclaimed property management duties to primary business responsibilities. It’s not simply a matter of squeezing in extra work. Escheatment involves spikes of activity rather than steady work—often at inconvenient times of year when other responsibilities are also spiking (notably when tax returns are being prepared). It doesn’t help that personnel often do not have needed expertise. 

Some of the spikes in work can be managed by cross-training staff to pitch in when needed. Working with outside unclaimed property specialists can help, not only with the extra work of reporting cycles, but also by providing deeper expertise than it’s possible for in-house staff to acquire. This blog will define the challenges of merging unclaimed property work with other duties and provide advice for overcoming the challenges. 

Getting Perspective on Unclaimed Property Workflow Issues 

Year end, quarter end and month end are all peak times for accounting and finance staff in general. Most of the state’s unclaimed property reporting deadlines fall within the same timeframes. For tax professionals, half of the spring unclaimed property season falls exactly into peak tax season. 

On the other hand, unclaimed property management really has to be a year-round endeavor to ensure all supporting records are in place and a plan is followed for accurate reporting. You also need time to lay the groundwork for successfully meeting the challenges of unclaimed property audits. 

Here’s what often happens: Accounting or finance professionals find themselves busy with other duties, then unclaimed property hits their radar and they realize they haven’t completed due diligence requirements—maybe even haven’t done due diligence (pun intended) on what those requirements are! They have to scramble to meet the deadlines, often taking shortcuts resulting in under-reporting or over-reporting the unclaimed property they hold. 

The truth is, when peak reporting time rolls around for unclaimed property, it is an intense effort that leaves little time for other duties.

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Topics: Compliance, Due Diligence, Reporting, Best Practices, Staffing