With a constant focus on identifying industry and regulatory initiatives, Ryan has recently become aware of a critical communication from the Delaware Secretary of State announcing a key development on the abandoned and unclaimed property front. On August 21, 2020, the Secretary of State issued letters to 200 companies strongly encouraging their entry into the state’s Voluntary Disclosure Agreement (VDA) Program. Companies were selected based on potential noncompliance with Delaware’s unclaimed property law.
The VDA Program was launched to encourage companies to disclose unreported, past-due unclaimed property in exchange for a waiver of interest and penalties. Companies identified for participation in this Program include businesses incorporated in Delaware as well as those with significant and/or numerous operating entities that are incorporated in the state.
While the Program is designed for voluntary compliance, those companies that receive the Secretary of State’s letter and do not respond within 60 days, indicating their intent to participate, will be automatically referred to the Department of Finance for audit. Given that these examinations can last several years and impact internal resources, companies should give this letter and the VDA Program strong consideration. Companies that fit the selection profile but do not receive a letter should also contemplate joining the Program.
With the 60-day window to register expiring in October, it is critical that corporate executives remain on the lookout for this letter. Oftentimes, these communications are directed via certified mail to an organization’s CEO or CFO to ensure appropriate notice to the company. It is important to alert executives to watch for this communication and ensure its routing to the appropriate decision maker to enable timely execution. If your company receives a Delaware VDA invitation letter, please contact a Ryan unclaimed property professional to discuss a potential strategy and next steps.
TECHNICAL INFORMATION CONTACTS:
Mark A. Paolillo
Principal
Ryan
857.288.1976
mark.paolillo@ryan.com
Susan Han
Principal
Ryan
442.244.2447
susan.han@ryan.com
Jeff Henshall
Principal
Ryan
404.682.1200
jeff.henshall@ryan.com
Christopher Jensen
Principal
Ryan
469.399.4142
christopher.jensen@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.