What is California’s Voluntary Compliance Program?
- California has established a voluntary compliance program for unclaimed property.
- Holders of unclaimed property who participate in the program may have interest waived on the property due to the state.
- To be eligible for the program, holders of unclaimed property must comply with specific terms.
- Once enrolled, the business must participate in a training program, review its books and records, and make a reasonable effort to notify owners of reportable property before submitting required reports to the Controller.
- The California State Controller’s Office has released a timetable for this year’s enrollment program, with specific dates for required training, due diligence, notice reports, and remittance submissions.
The Voluntary Compliance Program in California allows unclaimed property holders to come forward and voluntarily report any unclaimed property that they may be holding. This program was designed to encourage holders to come forward and report unclaimed property, even if they were unaware they were holding it. The program provides benefits to holders who choose to participate, such as a reduction in penalties and interest on any reported unclaimed property.
For more information on the California Voluntary Compliance Program and how to apply, visit the California State Controller website here.
What are a few benefits of California’s Voluntary Compliance Program for holders of unclaimed property?
The California Voluntary Compliance Program provides benefits to holders who choose to participate, such as a reduction in penalties and interest on any reported unclaimed property.
- There could be significant cost savings for businesses with California-based activities, clients, or suppliers.
- In California, interest on the past-due property is calculated at 12% per year. Holders of unclaimed property who are admitted to the program by the state of California may be able to have interest on the property waived.
- Also, given the widespread increase in enforcement of unclaimed property laws across the country, volunteers of this program could avoid being audited and subsequently fined, for past unclaimed property.
Who can apply for California’s Voluntary Compliance Program?
The following requirements must be true of the holders of unclaimed property to qualify for the program:
- The holder cannot apply if they are currently being investigated for unclaimed property.
- The holder is not eligible if they are currently under investigation, either civilly or criminally
- The holder does not meet the requirements of this program if they currently have unpaid interest assessments from the previous five years.
What are the important dates to remember for California’s Voluntary Compliance Program for 2023?
The following dates will be assigned to new enrollees for the upcoming reporting year:
- July 31, 2023 – Required training to be completed.
- September 30, 2023 – Due diligence to be completed.
- Before November 1, 2023 – Notice report to be completed.
- June 1–15, 2024 – Remit report and remittance to be submitted.
Why does California’s Voluntary Compliance Program matter to businesses with California-based operations, clients, or suppliers?
As a business with operations, clients, or suppliers in California, you understand the importance of compliance with state regulations. However, one aspect that may be overlooked is the obligation to report any unclaimed property that your company may be holding on behalf of its customers. Failure to do so can result in severe penalties and interest charges, which can harm your bottom line.
Fortunately, California’s Voluntary Compliance Program offers a solution. By proactively reporting any unclaimed property, you can avoid these penalties and demonstrate your commitment to responsible business practices. This program is especially relevant to credit unions and other financial services companies that may be holding unclaimed property on behalf of their customers.
But identifying and reporting unclaimed property can be a complex and time-consuming process, and many businesses may not even be aware that they are holding such property. This is where UPCR comes in. As experts in unclaimed property compliance, we help you navigate the regulatory landscape, identify any unclaimed property you may be holding, and develop a compliance strategy that meets your unique needs. Contact us today to schedule a free consultation.