The Delaware Secretary of State (SOS) is sending follow-up letters to businesses that have not yet responded to letters from the state inviting them to enroll in their voluntary disclosure (VDA) program. The original invitations were mailed around February 24, 2023. See our blog regarding the mailing to learn more.
Delaware’s unclaimed property law requires the state to first notify the holder, in writing, that it may enroll in the SOS VDA Program before the state can initiate an unclaimed property examination (audit). Holders must enroll within 90 days of the invitation, or they will be referred to the Department of Finance’s Office of Unclaimed Property for audit to determine compliance with the law.
The follow-up letters remind holders of the 90 day-period, and encourage holders to enroll, indicating that “the Office of Unclaimed Property will issue Notices of Examination to any Holder who has not enrolled in the SOS VDA Program by May 25, 2023.”
Once the state issues an audit notice, the holder is precluded from enrolling in the SOS VDA Program.
Senate Bill 281, effective June 30, 2022, added a provision to Delaware’s law which states that notice to the holder of the VDA program is not required if the Department of Finance’s Office of Unclaimed Property has requested a verified report or a compliance review and the holder has failed to respond or complete such report or review. Such failure on the part of the holder may also lead to an audit.
As Delaware continues to employ various methods to enforce the unclaimed property law, holders should be ever mindful of all communications from the state, particularly if the business is incorporated or has significant operations in Delaware.
According to the state’s website, another round of SOS VDA invitations is expected to mail on or around July 14, 2023.
If you recently received any type of correspondence from Delaware, we encourage you to contact MarketSphere to consider your available options and determine your next steps.
*Content contained in this article is considered accurate as of the publish date.
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