Delaware Mailing Invitations to VDA Program on Friday February 23, 2024

The first round of invitations to the Delaware Secretary of State (SOS) voluntary disclosure agreement program (VDA program) for this year are scheduled to be mailed on Friday, February 23^rd.

A second round is scheduled for July 26, 2024, though these dates are subject to change.

The invitations are time sensitive.  Businesses that do not enroll within the 90-day notice period referenced in the letter will be referred to the Department of Finance for an unclaimed property audit.

As we mentioned in our prior blog post, Delaware employs several enforcement measures to ensure holder compliance with their unclaimed property law.  As a reminder, Delaware cannot perform an examination (audit) unless the business has first been notified by the Secretary of State of the option to enroll in the VDA program.

Participation in Delaware’s VDA program has its advantages, including:

• Greater control over the process, by allowing the business to perform a “self-review” of its books and records;
• Testing procedures are less stringent than those under an audit;
• Upon completion, the business receives a waiver of interest and penalties and a release of liability related to the entities and property included in the VDA; and
• A typical completion within two (2) years.

Enrolling in Delaware’s VDA program is an alternative to a potentially lengthy and costly audit.  It may be particularly beneficial for businesses that have past-due property in a particular area or for a business that is preparing for or has recently undergone a merger or acquisition.

There may, however, be instances where Delaware’s VDA program may not be in the business’s best interest, so it is important to know the risks as well.  For example, participation in the VDA program prevents a business from legally challenging Delaware’s positions down the road, including the use of estimation.

Educating yourself and your business, of the various enforcement tools employed by the state will enable your business to respond appropriately to any communication received from Delaware, particularly if the business is incorporated or has significant operations in the state.

If you recently received any communication from Delaware, we encourage you to contact us so that we may assist you in considering your available options and determining your next steps.

*Content contained in this article is considered accurate as of the publish date.