Updates to the Delaware VDA Program and to Audits in Delaware per
DE SB 104
Delaware Senate Bill 104, effective on August 1, 2021 (though some provisions will apply retroactively) significantly modifies the enforcement scheme in Delaware.
For a full summary, see our post from 7/14/2021: A Deep Dive Into DE SB 104
Outside Delaware: Third Party Contractor-Assisted Self Examinations
Faegre Drinker Biddle & Reath LLP (FDBR) is now enrolling holders into the Florida Contractor-Assisted Self Examination (CASE) program. Holders may now elect to participate in a self-examination program in any of the following states with which FDBR is contracted:
One benefit to enrolling in such a program is that if you are a holder currently participating in a Delaware VDA (FDBR is also contracted with the state of Delaware), the same records can be used to identify and resolve liabilities owed to any of these three states.
Participation in the various self-examination programs is limited to holders who are not currently under audit. The look-back period, or the period for which holders must review their records, for self-examinations is 10 years, plus dormancy, and interest and penalties will be waived. The expectation is that self-examinations will be completed within a one-year period.
Outside Delaware: Third-Party Auditor-Assisted Self-Reviews (Self-Audits)
Several states are also sending letters encouraging holders to perform a self-review of their books and records, but with the assistance of a third-party auditor, including:
These outreach letters are sent to holders that the state believes may be noncompliant with their unclaimed property law – i.e., holders who have not reported or have only rarely reported unclaimed property to the state. Holders must respond within a certain timeframe (for example, 30 days in Massachusetts and 45 days in Minnesota) or risk being subject to a formal examination, which may include the assessment of penalties and interest. Holders initiate the self-review process by confirming their participation via a link provided by the state. Note that look-back periods for the review of records can often extend as far back as 10 years. Assistance with the process is provided by a third-party auditor, such as Kelmar Associates or Kroll Government Solutions.
Next Steps for Holders
As states continue to enforce their unclaimed property laws, whether by invitation to enter into a formal voluntary disclosure program, request to perform a self-review, compliance reviews and/or formal audit or examination, we recommend that holders review their unclaimed property policies and procedures and perform their own internal review in advance of receiving such an invitation or notice. If you need assistance in performing a risk assessment, or in strengthening your unclaimed property policies and procedures, contact MarketSphere for a consultation.
*Content contained in this article is considered accurate as of the publish date.
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