Unclaimed property is a major source of revenue for states and, consequently, poses a significant risk to companies that are not in compliance with the annual reporting requirements of the 54 reporting jurisdictions (the 50 states, Washington DC, Puerto Rico, the U.S. Virgin Islands and Guam). There are also 3 Canadian provinces with unclaimed property laws. Given that unclaimed property is not a tax, it is often overlooked in a company’s compliance process and the ramification of non-compliance is significant given that most states do not have statutes of limitation and unclaimed property audits can range from 15 to as many as 22 years.
Unclaimed property includes, but is not limited to, obligations owed by a company to its employees, vendors, customers, or shareholders that remain outstanding/unpaid after a prescribed number of years. Every company regardless of industry, size or location has the potential to generate unclaimed property.
If your company, (i) has never filed unclaimed property reports; (ii) filed historically but is currently out of compliance; (iii) files incomplete reports (all relevant property types not included in reporting); (iv) has been acquisitive through stock acquisitions where successor liability now rests with your company; (v) has never been audited by your state of incorporation; (vi) or was audited more than 6 years ago, you are at heightened risk for an unclaimed property audit likely from a 3rd party contingent fee audit firm in the form of a multi-state (20-34 state) audit.
Clarus Partners’ experts can determine if your company is at risk for unclaimed property liability and identify ways to mitigate said risk, including the waiver of applicable interest and penalties. We can also assist you with audit defense to minimize overall exposure as well as annual compliance to ensure timely reporting with all applicable jurisdictions. Our suite of services includes: