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Compliance Alert – Spring Unclaimed Property Reporting Deadlines!

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Just because you are finally finished with Fall unclaimed property reporting, does not mean you can sit back and take it easy. With the New Year, you need to think about the next filing season!

Remember there are states that require “spring” reporting, including:

• Delaware (3/1/19)
• New York (3/10/19)
• Connecticut (3/31/19)
• Pennsylvania (4/15/19)
• Florida (4/30/19)
• Illinois (5/1/19)
• Vermont (5/1/19)
• Michigan (7/1/19)
• Texas (7/1/19)

These states have a variety of due diligence threshold requirements, ranging from $50 to $0, and differences in notification requirements (from certified mailings to first class letters).

Our professionals at UPCR are knowledgeable and experienced with filing requirements for all jurisdictions. We can ease your mind and assist you with all aspects of reporting! Contact us today!

The IRS recently published a new Revenue Ruling 2018-17 regarding escheated IRA’s, with an effective date of January 1, 2019.

This ruling now requires holders to withhold federal income tax at the 10% rate for “nonperiodic distributions” on escheated traditional IRA accounts turned over to the states. It also requires the IRA trustee to report the escheated IRA distribution to the IRS on Form 1099-R.

This ruling does not apply to IRA owners who elected to opt out of their withholding according to IRA rules.

Follow the link to the official ruling by IRS: https://www.irs.gov/pub/irs-drop/rr-18-17.pdf

Need assistance in updating your policies and procedures to reflect the Revenue’s Ruling for any escheatment that occurs in 2020 and later? Contact the experts at UPCR for a free consultation.

In February, California introduced AB-2773 which would create a Voluntary Disclosure Agreement (VDA) program.

This is the first time since 2000 that California has considered any kind of amnesty, so it is welcome news to all holders if it passes. HOWEVER, it has a sunset provision to end in 2024, and applies to holders who are not under audit or investigation of non-compliance.

Under this proposal, holders have a one-year time frame to complete a self-review of the past ten years beginning from the VDA date or one determined by the State. After the 12 month period, the holder must make payment in full or enter into a payment plan.

Companies who report to California are encouraged to take advantage of this offer, as current California UP Law do not include any VDA or amnesty provisions.  California has one of the highest penalty charges and contracts with aggressive auditors than most states.

Presently the bill is still in committee, and the last hearing set for April 23rd was cancelled and sent to committee, who has not taken further action.

Have questions and need assistance in filing a VDA any state, or have other UP related questions, contact the experts at UPPO!

 

 

 

If you aren’t already gearing up for 2018 Spring reporting, you better get a “spring in your step” to be in compliance with due diligence and remittance activities for UP reporting for the following states:

  • CT (due 3/31 in non-leap years)
  • DE (due 3/1 for all except financial)
  • FL (due 5/1); IL (due 5/1 for Business associations, utilities)
  • MI (due 7/1)
  • NY (due 3/10 for business entities, but some Feb dates for other types
  • PA (due 4/15)
  • TN (due 4/30)
  • TX (due 7/1)
  • VT (due 4/30)
  • Alberta, CA (due 4/29)

Also, many states’ life insurance reports are due in the Spring.

Remember California final remittances are due between 6/1 – 6/15).

The “Dual Reporting” cycle of states is time consuming and burdensome.  UPCR has the technology and resources to assist you and ease your mind.  Contact us today for a free quote.

Every state except Mississippi requires holders to maintain unclaimed property records for up to 10 years after filing.  Most states’ unclaimed property record retention periods exceed the more familiar standard tax laws.  Some states do not have specific requirements regarding times and types of property to be retained, while others are very specific. Many of them have different time frames for specific property types like, money orders and travelers checks.

It can be burdensome, confusing and time consuming to create and maintain unclaimed property retention procedures and schedules.  However, it is important to do so to avoid fines and/or penalties that may be imposed if audited.

Below are some general tips to include in unclaimed property procedures specific to retention of records:

  1. List all state(s) of incorporation for each operating entity.
  2. List all states where reports are filed.
  3. Types of property filed (e.g., Payroll, Accounts Payable, Accounts Receivable, Gift Cards, etc.).
  4. Review the statutes regarding retention for your state of incorporation and compare them to the other states that you’re filing to.
  5. Review the dormancy periods for the types of property you are reporting annually.
  6. Retention varies with each state, therefore, make note of the longest period required for retention obligations.  This can be used as a guideline for all for all your unclaimed property record retention instead of attempting to manage each jurisdiction individually.
  7. Keep documents that verify any reversals, accounting and data errors/corrections, proof of timely reporting, evidence of due diligence including certified mailings and due diligence responses and last date of contact with owner.
  8. Review your policy annually to ensure it is still accurate and applicable to each operating entity.

Need assistance in creating a retention policy?  Contact the experts at UPCR. We have all the information for each state.  Avoid potential costly audit findings –  consult us today for a free quote.

Earlier this year, the Illinois Revised Uniform Unclaimed Property Act was passed by the Illinois General Assembly.  This was the first complete re-write of the Illinois Unclaimed Property law since the original enacted in 1961.

 The new law took effect on January 1, 2018.

With the passage of the Illinois Revised Uniform Unclaimed Property Act, many changes will affect your unclaimed property reports.  A few highlights include:

  • All holder reports MUST be filed online in a NAUPA standard electronic file
  • Due diligence letters are only required for property valued at $50 or more (instead of $10)
  • Most abandonment periods will now be 3 years instead of 5 years
  • Changes in owner contact standards will allow more owner accounts to stay active
  • New abandonment rules for certain types of property, such as securities, retirement accounts, pre-need funeral trusts, college savings accounts, life insurance, and others
  • Removal of the Business to Business exemption loophole

If you have questions, or need help filing your report, contact the experts at UPCR!     

Many holders do not have formal written policies/procedures for managing their unclaimed property liabilities.  This omission could have a negative fiscal impact in the event of an audit.  One of the first things an unclaimed property auditor asks for is this manual.  In addition to compliance issues, strong, current documents will:

  • Strengthen your company’s internal controls.
  • Ensure that your program operations will run more effective and efficient.
  • Prove invaluable in the event of losing your unclaimed property administrator or staff as they will help with continuance of the program with little disruption.
  • Ensure separation of duties, thus minimizing potential collusion or fraud.

If your firm does not have policies and procedures, or if you have questions and need assistance with creating or updating them, contact UPCR.  Our staff specializes in this area of unclaimed property administration.

Call today for a free consultation!

Trying to find lost owners can be challenging, but if you have good procedures in place, you may be more successful.  Below are some tips from the experts at UPCR:

• Confirm the minimum dollar values required by states.
• Verify whether the state requires a date or a time period to notify owners.
• Confirm that the owner does not have other active accounts, or is a current employee.
• How does the state want notice – letter, certified mail, publication?
• Make sure your letter easy to understand and clearly states where/how/when to reply.
• Is your letter or post card clearly marked Action Needed, Response Required, Urgent, etc.?
• Emphasize that the property will be turned over to the state if there is no response.
• Give ample time to reply and process their payment – be sure to give a reasonable deadline to do so.

UPCR successfully performs due diligence for our clients. Contact us today for a free consultation – we will be glad to take this burden from you!

As we previously mentioned, Delaware enacted SB 13 on February 2, 2017, which was a major overhaul of its unclaimed property statute. They later amended the bill (SB 13) in June. This legislation and ensuing adopted regulations will have a major impact on holders:

• Companies who are currently undergoing an audit by the State as of July 22, 2015, have the option to convert their audit to a VDA.

• Companies who were undergoing an audit as of February 2, 2017 may convert to an accelerated audit.

• Companies also have the option to continue in the current audit process.

• Companies electing to convert an audit to a VDA must do so by DECEMBER 11, 2017.

If your company is currently under audit by Delaware, it is important to research the audit status and issues to determine the best course of action as there are pros and cons to each option. Do not delay, as time is running out.

Contact the experts at UPCR for a free consultation as to the most effective and efficient plan for your company.

As you are painfully aware, time is running short to submit your Fall unclaimed property reports to all the states.  If your company reports to all jurisdictions, it is even more time consuming and stressful.

Just one of the confusing aspects is the due date for filing the report with the states.  If you look at the states’ websites, many of them instruct holders to submit their report November 1.  However, if you research the respective state laws, you will find many, if not most states, require the property to be filed “. . . before November 1 of each year as of June 30 next preceding”.

So, if you wait until November 1 to submit your report, you MAY be late.  Generally, the state unclaimed property managers don’t make an issue of this. BUT, if a state auditor or an aggressive administrator is so inclined, you could be assessed a late filing penalty.

UPCR recommends having your reports into the state on or before October 31 just to be safe.  If you have any questions about reporting due dates, or any other reporting issues, contact us.  We are experts in Unclaimed Property Reporting.