With a constant eye on legislative and industry developments, the Ryan Unclaimed Property practice is keenly focused on a new initiative recently launched by the state of Delaware. In November 2023, the Delaware Department of Finance, Office of Unclaimed Property (OUP) began issuing notices to businesses across all sectors requesting that holders complete the state’s verified report process or face further enforcement due to inaction. Given the potential implications of the state’s campaign, the Ryan team has outlined key components of the statutory provision and next steps for addressing this critical request.
Delaware Verified Report Regulation: Key Developments
Based on Section 1170(a) of the Delaware Unclaimed Property Statute, the State Escheator is authorized to require the holder to complete a verified report analysis within 180 days from the date of the notice. A key driver of this development was a June 2022 Delaware Senate Bill, which broadened the scope of Section 1170 by allowing the OUP to call for a verified report from any company—without question and regardless of their compliance profile.
Prior to June 2022, only holders that did not file a report or were believed to have summitted an insufficient, inaccurate, or false filing could be required to provide a verified report. Today, the landscape has changed with the OUP now executing this program with support from third-party audit firms.
Complying with the Verified Report Process: Vital Steps and Considerations
Holders that receive outreach from the Delaware OUP must respond within 30 days of the letter date and acknowledge receipt of the communication and their intent to complete the verified report process. Within 180 days of the notice date, holders are required to provide the following:
- A notarized verified report for the most recent filing years
- A list of the legal entities
- A description and copy (if available) of the companies unclaimed property compliance policies and procedures
Based on our research, it does not appear that extensions will be granted to companies that do not execute the steps referenced above within the specified timeline. Failure to initiate or complete the process within the timeframes outlined by the state would likely result in referral for audit and penalty and interest assessment. Companies in receipt of a verified report notice are not precluded from entering the Delaware Secretary of State Voluntary Disclosure Agreement (VDA) Program—another vehicle for holders pursuing an alternate path to compliance.
If you receive outreach directly from the Delaware OUP or would like more information, contact any of the Ryan unclaimed property experts listed below today.
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
Sonja Roman-Molina
Principal
Ryan
954.740.6255
sonja.roman@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.