We recently posted about the importance of checking the mail for letters inviting holders to participate in the Delaware Secretary of State’s Voluntary Disclosure Agreement (VDA) program. Delaware is scheduled to mail a new round of VDA invitations on May 14th. More states are beginning to join this outreach trend. Maine and Massachusetts appear to be joining states like Nevada and Washington in mailing targeted outreach to holders regarding their compliance with the unclaimed property laws, which can take the form of self-audit questionnaires or invitations to self-audit books and records, and often disclose that they will be assisted by a third-party auditor in the process.
Maine: Initial Notices of Compliance and Reporting Outreach
A Notice entitled “Holder Examination Process Commences” was recently posted on the Maine State Treasurer’s website, which states that:
“Maine’s Revised Uniform Unclaimed Property Act (RUUPA) enables the Treasurer to engage third parties to examine holders of unclaimed property to ensure compliance with Maine law. Some Maine-based holders will soon receive initial notice of compliance and reporting outreach from the State Treasurer or third parties.” (emphasis added).
While Maine does not have a formal voluntary compliance program, the state will review requests from holders on an individual basis. It appears from the notice, however, that Maine is preparing to go on the offensive and is also contracting with third party auditors to assist them with their outreach efforts.
Massachusetts: Self Review Invitations
The Commonwealth of Massachusetts has confirmed with MarketSphere that letters are being mailed to holders that the Commonwealth believes may be noncompliant with the unclaimed property law, inviting them to perform a self-review of their books and records. Holders must respond within 30 days from the date of the letter, which includes uploading certain information to the Commonwealth’s website. Once completed, holders may be contacted by Kelmar, a third-party audit firm that has been contracted to assist the Commonwealth in this review process.
The Commonwealth of Massachusetts has a voluntary disclosure program, whereby holders complete a detailed self-audit, reviewing records for a minimum of 9 years, and submitting a detailed narrative report, along with a VDA. If the VDA is accepted, interest and penalties will be waived. Participation in the VDA program, however, is limited to first time filers only.
As the pandemic continues to affect state budgets, we expect to see continued enforcement by the states in the form of invitations to VDA programs, self-reviews, compliance reviews and/or audits. We recommend that holders review their unclaimed property processes, and do not wait until someone in the organization receives a letter or invitation from the state(s). If holders do not respond to state outreach, states likely will escalate to an audit.
If you receive have received an invitation to self-review or to enter into a voluntary disclosure agreement or need assistance in performing a risk assessment or in tightening your unclaimed property policies and procedures, we can help. Contact MarketSphere to schedule a no cost/no risk consultation to discuss your issues and options.
*Content contained in this article is considered accurate as of the publish date.
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