Every U.S. state, the District of Columbia, Puerto Rico and the Virgin Islands have unclaimed property laws (also known as escheat) that work to find owners of lost and forgotten assets before they must revert to the state. Unclaimed property, commonly referred to as abandoned property, refers to accounts at businesses of all sizes that have had no activity or contact with the owner for varying periods of time (can be as short as one year or up to 20 years depending on the state or the type of property). Some common forms of unclaimed property include uncashed checks (dividends, payroll, refunds, etc.), unused gift cards, bank accounts, safety deposit boxes, stocks or insurance payments or refunds.
Businesses are required to report annually these unclaimed accounts and remit to the state the balances. The state takes custody of the unclaimed property and holds it until the owner of the property comes forward and claims it.
Many companies overlook their compliance requirements with respect to unclaimed property. Compliance under these rules can be complex, as the state that is entitled to the account balances may be difficult to determine, and the definition of abandoned property may not be clear. Further, compliance with these rules isn’t confined to filing a return – each state has notification requirements that need to be addressed. Andersen Tax can assist companies looking to manage their unclaimed property compliance process including developing a system for regular review, account maintenance and data sharing across various functions. Andersen Tax can also assist with audit defense, state voluntary disclosures, due diligence, and consulting.
Unclaimed Property Compliance
Andersen Tax can assist clients with reviewing their compliance processes to identify opportunities to enhance, streamline and automate the unclaimed property management and filing function. Our experience with internal systems and tax technology can improve processes, strengthen internal controls and reduce the cost of compliance.
Unclaimed Property – Policies and Procedures
Andersen Tax can assist with reviewing internal technology and systems, identifying existing unclaimed property, analyzing internal diligence, and building and implementing a communication plan with various functions of the company to review and regularly monitor its activities to ensure compliance. Andersen Tax focuses on identifying and adopting best practice methodologies specifically suited to our clients’ business activities.
Audit Defense Services
State and local tax authorities are becoming very creative and aggressive in their audits of business taxpayers. Andersen Tax can assist clients in managing an audit from start to finish. Andersen Tax has extensive experience representing clients and our credibility, systems experiences, and knowledge allow us to obtain the best possible results.
Voluntary Disclosure and Amnesty
As companies expand operations across state lines, or engage in acquisitions of existing companies and business operations, they face questions about successor liabilities. Andersen Tax can assist clients in determining past state and local tax exposure where they may have unclaimed property, and negotiate on an anonymous basis to minimize penalties and interest through voluntary disclosure and amnesty agreements.
Andersen Tax assists clients by searching and identifying unclaimed property among the states it operates in, and completing the requisite paperwork, filings and identifications to return the funds to the owner