Virginia Announces Unclaimed Property Amnesty Program

The State of Virginia is currently offering amnesty for holders of unclaimed property. The program allows businesses and organizations with unclaimed property obligations to voluntarily report past obligations without penalty or interest assessments. The program also limits the state's look-back period to ten (10) years. On audit, the look-back period for non-compliance can go as far back as the date in which operations commenced in the state.

Background

Any type of organization or business (including not-for-profit) in any industry has the potential to generate unclaimed property and be subject to these state laws. Certain industries generate unique types of unclaimed property, including retailers, health care, transportation, utilities, insurance, and financial institutions. Types of unclaimed property typically include, but are not limited to: uncashed payroll, accounts payable and benefit checks, unclaimed deposits, unidentified payments, credit balances, and gift certificates. In short, any amount that may be owed to another person or legal entity and remains outstanding could be considered unclaimed property. Further, amounts that have been written off the books, or if documentation is lacking to substantiate the appropriate disposition of funds, the state has the authority to develop an estimated liability for these items under audit.

Opportunity

Companies can take a proactive approach to unclaimed property compliance with a voluntary review of compliance needs and objectives. By undergoing a self-review, companies can resolve any unclaimed property exposure with the identification, quantification, and negotiation of favorable voluntary disclosure terms with Virginia, or any other jurisdiction where property is found due.

Companies that may not be in compliance with Virginia's unclaimed property laws and regulations can apply for amnesty, unless the state has contacted you for audit. Amnesty will not be extended beyond December 31, 2003. The magnitude of this offering cannot be understated, as the Virginia Unclaimed Property Administrator has proclaimed in a recent communication, "When [amnesty] is over . . . interest and penalties will apply."

If you have any questions regarding the above information, please contact Mr. G. Brint Ryan, Managing Principal of Ryan & Company, at 972.934.0022. Mr. Ryan can also be reached via e-mail.