Delaware is sending voluntary disclosure agreement invitations to holders believed to be out of compliance with its unclaimed property laws. As many as 1,000 Voluntary Disclosure invitations are expected to be mailed throughout 2020.
If an invitee does not enroll in the SOS VDA Program within 60 days of the invitation mailing, the company will be referred to the State Escheator for examination.
Continue reading to see what to do if you receive one of these notices.
In September 2018, Delaware State Escheator Brenda Mayrack presented at Keane’s annual Client Connection event in Philadelphia. Within her presentation, Ms. Mayrack outlined the priorities of the Delaware unclaimed property program, one of which is the use of audits and examinations when necessary.
Ms. Mayrack also detailed new annual compliance review process and changes to the Delaware unclaimed property audit and voluntary compliance initiatives. Amongst these changes is a significant shift in position for holders that received an invitation to enroll in the Voluntary Disclosure Agreement program operated by the Delaware Secretary of State.
Latest Wave of Delaware Voluntary Disclosure Invitations
Keane has learned that a wave of Delaware Voluntary Disclosure Agreement invitations has been sent out via certified mail to holders believed to be out of compliance with Delaware unclaimed property statutes. These invitations were typically sent to the Chief Financial Officer, but are now also being sent to the company’s Delaware registered agent to ensure the appropriate staff is notified with enough time to make a deliberate and informed decision to enter the VDA program.
Previously, any holders that received an invitation to enroll in the program, but chose not to were considered “audit eligible,” but were not always audited. Per Mayrack, an audit notice will be issued to every company who does not accept the invitation to join the VDA Program. Companies will continue to have 60 days from the date of the invitation to file an application to participate in the SOS VDA program.
If an application is not received within the 60 day grace period, Mayrack indicated that an audit notice can be expected within 15 to 45 days following the cut-off. Once an audit notification is issued, companies will no longer have an opportunity to elect the SOS VDA program.
What to Do if you Receive a Voluntary Disclosure Invitation
As noted above, if you receive an invitation – do not ignore it. Holders that choose not to enroll in the program will receive a Delaware unclaimed property audit notice. This also applies if you have received a similar invitation in prior years. It’s important to note, that if you have received an invitation in the past and have not received an audit notification, the SOS VDA program is still an option to be considered.
If you choose to enroll in the voluntary disclosure program and need assistance in completing the various deliverables and requirements, Keane’s National Consulting & Advisory Services Team stands ready to assist. Keane’s experts have helped countless organizations complete the Delaware Voluntary Disclosure Agreement process in an efficient and streamlined manner, protecting them from an audit and receiving a waiver of fines and penalties. Contact us for a complimentary consultation and details.