New York Significantly Steps up Audit Enforcement while Increasing Incentives for Voluntary Compliance

In early 2017, the State of New York’s Comptroller’s Office made a number of changes to the
enforcement of its unclaimed property program. These changes will most likely have two main effects on companies operating in New York: significantly increasing the liability risk for non-compliant companies while at the same time providing an opportunity for substantial savings under its Voluntary Compliance Agreement (VCA) program.

Increased audit enforcement by using private, for-profit auditor firms

The state of New York has recently hired several private auditor firms to conduct unclaimed property audits on its behalf, which likely signals an inclination to enforce its audit program in a more robust and assertive manner.

Ryan’s experience is that New York is currently targeting a number of industries for audit, such as healthcare, financial services, music and entertainment, and publishing and digital rights management.

Additionally, companies that are incorporated in New York or have a significant presence in that state are likely to face higher liabilities if audited. Unclaimed property audits administered by private auditor firms are typically difficult for companies to navigate; they can last for several years and often result in six- or seven-figure liability assessments.

More attractive voluntary compliance program

However, on January 20, 2017, New York announced the details of its new voluntary compliance program, which cuts the look-back period in half and eliminates penalties and interest. As a result, the new program presents a significant opportunity for companies that are not in compliance with New York unclaimed property laws as well as for companies in industries that are currently being targeted for audit.

The chart below illustrates the significant benefits of the new VCA compared to a situation in which a company is selected for audit:

To take advantage of New York’s new and more business-friendly VCA and to reduce your company’s
audit risk, please reach out to one of Ryan’s unclaimed property professionals.

TECHNICAL INFORMATION CONTACT:

Jacob Oennerfors
Manager
Ryan
212.847.0126
jacob.oennerfors@ryan.com