Delaware Notices for Verified Reports

Notices for Verified Reports

MarketSphere has learned that holders are currently receiving notices requesting Verified Reports of unclaimed property. The purpose of the Verified Report process is to require holders to attest to the completeness of a report previously filed, or that there was no property to report, if a negative report was filed (which is not required in Delaware), and to determine whether the holder has existing policies and procedures around unclaimed property compliance. As a reminder, Delaware’s enforcement techniques were expanded and codified with Senate Bill 281, enacted in June 2022.

The Notice Requesting a Verified Report requires holders to provide the following information to the Delaware Department of Finance within 30 days of receipt of the notice:

A complete and notarized Verified Report form for the specified report year.
A list of legal entities that were included in the Verified Report.
A response as to whether the holder has established unclaimed property policies and procedures, along with a copy if they exist.

While the state sends out the requests several times per year, it is important to note that third-party audit firms assist Delaware in managing the Verified Report process and that holders should expect to receive a request once every three to four years.

Importance of Timely Responses

A holder’s response within 30 days is crucial. Although holders have a full year to complete the Verified Report process, the FAQs suggest that information should be submitted “as soon as possible, but no later than 180 days from the date of the Notice,” to facilitate review and completion. A response within the 30 days timeframe will typically result in an extension from the reviewer if more time is necessary.

The Verified Report form also warns that failure to meet the deadline may lead to referral to the state’s Voluntary Disclosure Agreement (VDA) Program or further enforcement action, such as an audit. Delaware’s current administrative policy is to waiver penalties and interest for property that was voluntarily filed during the Verified Report process, even if late filed. If a holder enrolls in the VDA program after receiving a Notice requesting a Verified Report, the Verified Report process will be terminated.

The Consequences of Non-Compliance

It’s essential to recognize that under Delaware’s unclaimed property law, the State Escheator has the authority to audit a holder who has not completed or responded to a request for a verified report or compliance review. Therefore, timely action is critical.

If you or your company has received a Notice Requesting a Verified Report, or for a compliance review (a more detailed review of the holder’s most recent report or non-filing), or any other communication from Delaware or another state, we recommend contacting MarketSphere. We can guide you in determining your next steps to ensure compliance with your unclaimed property obligations.

*Content contained in this article is considered accurate as of the publish date.