Top 10 Reasons to Enroll in the California Unclaimed Property Voluntary Compliance Program

California maintains one of the most rigorous unclaimed property enforcement environments in the United States. With statutory interest accruing at 12% per year on past-due liabilities, unclaimed property exposure can escalate quickly and materially impact an organization’s financial position.

The California State Controller’s Office (SCO) Unclaimed Property Voluntary Compliance Program (VCP) provides an opportunity for holders to address historical noncompliance in a structured manner while mitigating interest exposure. As enforcement activity and outreach efforts continue to expand, businesses should carefully evaluate whether participation in the VCP aligns with their compliance and risk-management objectives.

Outlined below are 10 key reasons organizations should consider enrolling in the California VCP.

1. Elimination of Statutory Interest

California assesses interest at a rate of 12% annually on past-due unclaimed property. Successful completion of the VCP allows eligible holders to obtain a waiver of interest, which can significantly reduce overall liability.

2. Proactive Resolution of Historical Exposure

Unclaimed property exposure often arises from legacy issues, including mergers and acquisitions, system conversions, decentralized processes, or incomplete records. The VCP allows holders to identify and resolve historical liabilities proactively, rather than reactively through enforcement action.

3. Reduced Audit Risk for Covered Periods

While participation does not eliminate the Controller’s audit authority, voluntary compliance generally presents a more controlled and cooperative path to resolution than an unclaimed property audit. Addressing exposure through the VCP may reduce audit risk for the periods reviewed.

4. Defined and Transparent Compliance Framework

The VCP establishes a clearly defined compliance roadmap, including assigned deadlines, training requirements, due diligence obligations, and reporting milestones. This structure helps reduce uncertainty and supports more accurate and consistent reporting.

5. Customized Reporting Timelines

Unlike California’s standard annual reporting cycle, VCP deadlines are assigned after enrollment. This flexibility can be particularly valuable for organizations with complex records or multi-year exposure.

6. Required Training and Stronger Internal Controls

As part of the program, designated personnel must complete mandatory unclaimed property training. This requirement supports stronger internal controls, enhances institutional knowledge, and helps reduce the risk of future noncompliance.

7. Opportunity for Owner Reunification

The VCP permits holders to complete due diligence outreach prior to remittance, increasing the likelihood that property is returned directly to its rightful owners.

8. Greater Certainty Compared to Enforcement Actions

Unclaimed property audits can be resource-intensive, disruptive, and unpredictable. The VCP offers a more predictable compliance outcome, with defined expectations regarding scope, timing, and deliverables.

9. Strategic Value for Mergers and Acquisitions

Organizations that have experienced mergers, acquisitions, or restructurings often inherit unclaimed property liabilities. The VCP can be an effective mechanism for addressing legacy exposure, including situations where prior reporting practices were incomplete or inconsistent.

10. Commitment to Compliance and Governance

Participation in the VCP reflects a good-faith commitment to regulatory compliance and sound governance practices. For many organizations, this proactive approach aligns with broader audit, financial reporting, and enterprise risk-management objectives.

Conclusion

With continued outreach by the State Controller’s Office and sustained enforcement activity, California’s Unclaimed Property VCP represents a meaningful opportunity for eligible holders to address historical exposure while mitigating interest risk.

Ryan’s unclaimed property professionals work with organizations to assess eligibility, evaluate potential exposure, and implement sustainable compliance solutions. Our team of experts is seasoned in the VCP process and ready to help inform your team and guide you through the process of the California VCP as well as assist with similar programs in other states.

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.