Did your company receive a letter from the Delaware Secretary of State (SOS) regarding its Unclaimed Property Voluntary Disclosure Program? As of June 16, 2021, the SOS finished mailing out another round of new invitations to the program, which allows companies to get into compliance with Delaware’s unclaimed property law without the threat of penalties and interest.
A targeted company has just 60 days to respond to the invitation to join the program. If your company does not respond by the deadline, it will be referred to the Delaware State Escheator for audit. To avoid an audit, companies should send a completed VDA-1 to enroll in the SOS VDA Program as soon as possible. In the case of the VDA invitation letters that were recently sent out, the deadline to respond may be extended to 90 days, with a reminder letter from the Department of Finance to be sent around the 60th day.
New legislation that addresses Delaware’s unclaimed property audit program was recently introduced and is expected to be passed some time during the 60-day window. If enacted, the new proposed legislation would strengthen Delaware’s audit program. It would affirm the broad and extensive nature of Delaware’s audit requests, despite recent litigation that has challenged the current procedures. As a result, the additional risk associated with opting out of the VDA and receiving an audit letter will most likely increase significantly with the proposed law.
The SOS has typically addressed these certified mail invitations to the company’s chief executive officer or chief financial officer, so please check with these individuals and/or the company’s mailroom if you are uncertain as to whether your company has been contacted.
If you are considering signing up for the VDA program, Ryan can help. We have a full-service team of unclaimed property professionals who can assist in analyzing your company’s records and identifying potential exposure. We can also assist in negotiating and settling the VDA in Delaware and/or any other state. Please contact our team for more details.
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.