Pursuant to Delaware’s recently enacted SB13, any holder currently under examination that received a Notice of Examination from the State Escheator on or before July 22, 2015, except any securities examinations in which estimation is not required, may convert the pending examination into a review under the Secretary of State’s voluntary disclosure program (See 12 Del. C. § 1173.).
As part of a recent communication, the Secretary of State (SOS) provided details explaining the administrative requirements that a holder must use to convert an existing audit to a voluntary disclosure agreement (VDA). In addition, the SOS provided details regarding (i) the VDA process for holders that convert their examinations, (ii) look-back period for examinations converted to a VDA (ten reporting years), and (iii) the use of estimation as part of a VDA.
Regarding estimation, the SOS has proposed estimation regulations that can be found at: "Delaware Proposed VDA Conversion Guidelines".
The public comment period for these proposed regulations end on May 3rd . It is anticipated that Delaware will issue final regulations shortly thereafter.
These proposed estimation regulations include sections dealing with their effective date, the scope of the VDA, permissible base periods, items to be excluded from the estimation calculation, aging criteria for outstanding and voided checks, and accounts receivable. In addition, there are sections dealing with projection and complete and researchable records.
It should be noted that as a requirement of SB13, Delaware’s Department of Finance (DOF) recently proposed regulations regarding its’ abandoned or unclaimed property reporting and examination manual. Click here to see our recent blog post for more information.