The Duff & Phelps
Unclaimed Property and Tax Risk Advisory team reported in
February 2019 that the Delaware Secretary of State sent unclaimed
property voluntary disclosure agreement (VDA) invitations to
Delaware incorporated companies throughout the United States on
February 15, 2019.
By law, recipient companies must have responded to these notices
within 60 days, or they would be referred to the Delaware
Department of Finance to commence an unclaimed property audit.
Traditionally, Delaware uses third party, contingently paid,
multistate auditors to conduct unclaimed property audits.
It has been our experience that notifications from Delaware are
addressed to C-Suite executives and often do not reach appropriate
parties in time to prevent an audit. We believe it is critically
important for all senior accounting or tax professionals at U.S.
companies incorporated in Delaware to make immediate inquiries to
the CFO and mail room staff to determine if such a notification has
been received.
Delaware Unclaimed Property VDA invitations were mailed to over
100 U.S. corporations in October 2018. We further reported that
Delaware intended to send up to 800 to 1,000 invitations in 2019,
beginning in the
first quarter.
Audit notices were sent by the Delaware Department of Finance on
January 3, 2019. These notices were sent to corporations that
received but did not respond to the October 2018
Delaware unclaimed property VDA invitations.
Any corporation that receives a notice from either the Delaware
Department of State or the Delaware Department of Finance is
encouraged to contact the Duff & Phelps Unclaimed Property and
Tax Risk Advisory team for a free consultation. Both events are
highly sensitive and may have a material P&L impact.
The deadline to respond to these letters was April 15, 2019. At
this time, notified companies that failed to respond have
extinguished all rights to enter the program. Based on the recent
history cited above, we would expect all remaining companies to
receive an audit notice in early May 2019.
Our team is highly experienced at guiding our clients through both
the
Delaware Unclaimed Property Voluntary Disclosure and Audit
Programs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.