Unclaimed property compliance is a year-round activity. But so is unclaimed property recovery.
Amounts owed to you (unclaimed property) can go unclaimed for a myriad of reasons. A company could have moved locations. They may have changed their process or contact point for payment receipt. A check could literally be lost in the mail. Once those items are lost and go unreconciled, they turn into unclaimed property. Unclaimed property can be funds held by a state/jurisdiction resulting from statutory escheat requirements or they can be outstanding balances held by a government entity (that may never be escheated) until you or your organization come forward.
State unclaimed property departments are holding billions of dollars, some of which can be found by going to state websites. Other government entities, from municipalities to federal agencies, are also holding significant amounts owed to companies. However, this information is often not made available via public websites and can be difficult to obtain.
Deadlines Could Be Imposed for Recovery
In addition to the difficulty of obtaining this data, some agencies have claims deadlines that unless met, cause amounts owed to be forfeited back to the government entity. This is similar to IRS refunds, which must be claimed within three years of the filing deadline of the related tax return. In the case of government balances due to companies, forfeiture deadlines vary by location and type of refund.
It is important to be constantly vigilant when it comes to unclaimed property recovery, due to the possibility of a claims deadline. When you combine government agency deadlines with general recovery requirements such as providing documents supporting the requested refunds (- in some cases government entities require the original check to be presented in order to have it reissued -) the recovery process can become almost impossible to navigate.
Organizations should not overlook letters they may receive indicating that there are funds being held. These letters, known as Asset Recovery letters, are typically sent by third party firms attempting to recover monies, that the company didn’t know were owed, and will work on the organization’s behalf to recover the funds.
Recovering unclaimed property can be tedious, time consuming and challenging. Most companies don’t have the staff, resources, knowledge or time to find and secure all property without jeopardizing core business activities.
Engaging with a professional advisory firm that specializes in unclaimed property compliance, as well as, Corporate Asset Recovery is an option many organizations opt for. Working with an experienced firm provides peace of mind that their unclaimed property status is compliant, and the experts can routinely search for Asset Recovery opportunities, keeping them from expiring and be another source of revenue for your company.
If you need more resources to help answer your escheat compliance challenges, visit the Knowledge Vault where you will find Ebooks, white papers and other documents to help you navigate the complexities of unclaimed property compliance.