The Duff & Phelps Unclaimed Property and Tax Risk Advisory
Team received notification on September 24, 2019 from Kristopher
Knight, Delaware's Chief Deputy Secretary of State, that the
latest round of
unclaimed property voluntary disclosure agreement (VDA)
invitations were sent within the last few days to
Delaware-incorporated companies throughout the U.S. Typically,
Delaware mails approximately 200 invitations per quarter.
By law, recipient companies must respond to these notices within 60
days, or they will 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 Duff & Phelps' 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's most recent round of VDA invitations were mailed on
or about May 24, 2019. Subsequently the Department of Revenue
mailed audit notices on August 21, 2019 to companies who failed to
reply to the May 2019 VDA mailing.
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 profit and loss (P&L)
impact.
The Duff & Phelps
Unclaimed Property and Tax Risk Advisory team has
learned that the response rate to Delaware's unclaimed property
VDA invitations has increased from less than 10% from the October
2018 mailing to just under 50% for the February 2019 mailing. It is
presumed that the increase is attributable to enhanced awareness
among U.S. corporations to this issue and that the response rate
will continue to rise throughout 2019 and beyond. Simply stated,
U.S. corporations will find the
Delaware Unclaimed Property Voluntary Disclosure Program
far more advantageous than the Delaware Unclaimed Property Audit
Program.
Our team is highly experienced at guiding clients through both the
Delaware Unclaimed Property Voluntary Disclosure and Audit
Program.
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.