Keane's Unclaimed Property Blog

Why are Organizations Willing to Risk Escheat Audits?

At this point, you probably know that many organizations are carrying unclaimed property and are in danger of  escheat audits. But why do companies seem to be so willing to risk non-compliance? While many companies are aware of unclaimed property compliance requirements, some will just wait until they get hit with an escheat audit to do anything. Others understand the risk, but do not want to allocate the time or resources needed to proactively define their liability and reduce it.  And some are simply uninformed of their compliance obligations.

Debbie Zumoff, Chief Compliance Officer at Keane Unclaimed Property, recently spoke with John Cummings, Editor of Business Finance and Author of the BizTaxBuzz Blog, about escheat audits and why they seem to be in the future of so many companies.  Click here to read the whole post.

Two of the downsides to not reporting unclaimed property are penalties and interest, which can quickly add up and even double the amount of underlying liability. For most companies, this can mean big losses. However, there are number of audit risk red flags that companies can look out for when it comes to unclaimed property. These include not reporting all property types, using inappropriate dormancy triggers, failing to perform state-mandated due diligence and many others. If companies are aware of these red flags upfront and keep them in mind when it’s time to file unclaimed property each year, they can better prepare for and defend against escheat audits and significantly reduce risk to their organization.

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Best Practices, Compliance, Escheat Audits, Unclaimed Property Audit, Unclaimed Property Reporting


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