As noted in our blog post from November 2023, Delaware’s expanded enforcement powers permit the State Escheator to request a verified report or compliance review from a holder for any reason, regardless of whether the holder has timely filed an unclaimed property report.
Delaware continued to send notices requesting a Verified Report to holders via third-party auditors who assist the state with the outreach and review process. Delaware plans on sending out approximately 2,500 notices per year. As such, holders should expect to receive a communication from Delaware once every four to five years.
While a compliance review is a detailed review of the holder’s most recent report filing (or non-filing), the Verified Report process is a limited review of the holder’s most recent report filing (or non-filing).
Per the Notice Requesting a Verified Report for Year 2023, holders must submit the following to the Delaware Department of Finance within 30 days of receipt of the notice:
As it pertains to the last bullet on the Verified Report notice, many holders who received a notice last year needed assistance in ensuring that their policies and procedures met the expectations of the state. Delaware has a checklist of requirements that should be included in a company’s policies and procedures.
Holders have 30 days to respond to the Notice to confirm receipt and while holders can request extensions in 30-day increments, all documentation must be submitted within 180 days, and the process completed within 1 year.
The failure to complete the Verified Report process within the deadline will result in the referral to the state’s Voluntary Disclosure Agreement Program (VDA program) or further enforcement action (i.e., audit).
Delaware’s current administrative policy is to waive penalties and interest for property that is voluntarily filed during the Verified Report process, even late-filed property. The enrollment into the VDA Program after the holder receives a Notice will terminate the Verified Report process.
Other states also actively enforce their unclaimed property laws, often by requiring holders to complete a self-audit via an online questionnaire. As with many of those states, third-party audit firms are also assisting in managing Delaware’s Verified Report process.
If you or your company has received a Notice Requesting a Verified Report or a compliance review, or any other type of communication from Delaware, or any other state, we recommend reaching out to an experienced professional who can assist you in determining your next steps to ensure you are up to date with your unclaimed property compliance and reporting obligations.
*Content contained in this article is considered accurate as of the publish date.
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