How is a company “noncompliant”?
Your company may not be in compliance with state
unclaimed property laws if:
- It has never reported unclaimed property to a state(s)
- It has reported unclaimed property sporadically
- It has reported unclaimed property for some property types but not for all of the types that the states require
- It has not performed due diligence per state requirements.
Failure to be compliant may cause your company to have past due liability. In addition, some states impose penalties and/or interest on top of the past due liability which may cause a company to have significant exposure.
What are the ramifications of noncompliance?
As states are searching for more sources of revenue, the number of audits being conducted is increasing rapidly. Many states and their agents perform research to determine ‘noncompliance’ and/or ‘under compliance’ as a method of selecting and targeting audits. As as result, not complying or not being in complete compliance may trigger an audit. Further, many states use a longer “reachback” period when auditing a company that has not been in compliance which results in greater liability.
How can my company become compliant and minimize its exposure?
A thorough review of pertinent records is necessary to determine potential liabilities. APS' knowledgeable staff provides client companies with an expedient, comprehensive review and recommendations for mitigating potential penalties and interest for past due property. If state negotiation is necessary, APS experienced staff can provide information, statistical analysis and meeting support.
Further, APS staff assists client companies in developing or modifying policies and procedures so that future unclaimed property is minimized.
My company recently received an audit notice from a state or state’s agent, what can we do to insure we are in compliance and mitigate penalties and interest?
In this situation, knowing what your potential liability may be is essential to determining the best strategies for mitigating penalties and interest. APS staff routinely assist clients in performing this review and in providing audit defense strategies. Assisting client companies in audit defense is a strong point for APS’ consultants who are steeped in state negotiation and unclaimed property audit defense experience. Expert audit defense assistance can often reduce companies liability significantly. Ask us for our latest client savings figures!