Unclaimed Property A Reporting Process and Audit Survival Guide

Chapter 1 Four Myths of Unclaimed Property.

Myth 1: "We Don't Have Unclaimed Property."

Myth 2: "Unclaimed Property Compliance is Voluntary."

Myth 3: "If I Don't Have Records, the Auditor Can't Determine Any Unclaimed Property Liability for My Company."

Myth 4: "I Am Only Liable for Reporting Unclaimed Property to States Where I Conduct Business (i.e., Have Nexus)."

Chapter 2 What Is Unclaimed Property?

Purpose of the Unclaimed Property Laws.

Terminology.

What Types of Property Can Become Abandoned Property?

When Does an Item Become Unclaimed Property?

States’ Responsibilities.

Holder’s Responsibilities.

Notes.

Chapter 3 Basics of Unclaimed Property Reporting.

Why You Must Report Your Unclaimed Property.

Determining Your Liability.

Where You May Have a Reporting Obligation: Jurisdiction.

Due Dates, Due Diligence, Aggregates, and Dormancy Periods.

Preparing the Report.

Note.

Chapter 4 Calculating Unclaimed Property Liability.

Gather Your Records.

Identify Your Company’s Unclaimed Property Types.

Determining Your Liability.

You Do Not Have All of the Records for the Audit Period: Determining the Best Estimation Technique for Your Company.

Do Your Due Diligence.

Complete the Final Summary Report and Pay the Money!

Chapter 5 Preparing for and Managing an Unclaimed Property Audit.

Audit Targets: Are You Next?

Offense--Contact the States for a Voluntary Disclosure Agreement.

Beware the Gift Horse.

Where to Start.

Defense--Your Company Has Received Notification of an Audit: Do Not Ignore the Letter!

First Contact.

Recruit Your Team.

Know Your Enemy: Unclaimed Property Auditors.

Audit Timeline.

Records Requests.

Opening Meeting.

Site Visit and Records Analysis.

Closing Meeting.

Final Assessment.

Appeal Process.

Audit Best Practices.

Post-Audit Cleanup.

Notes.

Chapter 6 Developing Unclaimed Property Policies and Procedures.

Compliance Timelines: Due Diligence, Aggregates, and Dormancy Periods.

Content of Due Diligence Letters.

Timing of Due Diligence Mailings.

Aggregates.

Dormancy Periods.

Record Retention Policies.

Managing Your Exceptions and Exemptions.

Internal Controls: Checks and Balances.

Internal Audits.

Handling a Desk Audit or Fishing Call from a State Auditor's Office.

Note.

Chapter 7 Exemptions and Exceptions to Unclaimed Property Reporting.

Business-to-Business Exemptions.

Current Business Relationship.

Gift Certificates/Gift Cards.

Gift Card Corporations.

Dormancy Fees.

Customer Credits/Credit Balances.

Tangible Personal Property.

Notes.

Chapter 8 Special Industry Considerations.

Insurance.

Offers to Settle.

Demutualization of Shares.

Banking.

When Is an Account Considered Dormant?

What Fees Can Be Imposed on Dormant Accounts?

Safe-Deposit Boxes.

Money Orders and Traveler's Checks.

Health Care.

Not-for-Profit Medical Service Providers.

Oil, Gas, Utilities, and Energy.

Oil, Gas, Coal Mining, and Other Mineral Mining Industries.

Utilities.

Utility Co-ops.

Retail.

Customer Loyalty/Incentive Programs.

Gift Certificates/Gift Cards.

Notes.

Chapter 9 Foreign Unclaimed Property Laws.

U.S. Laws on Foreign Escheat.

Indian Reservations.

U.S. Territories.

Other Nations' Laws.

Canada.

United Kingdom.

Australia.

New Zealand.

Hong Kong.

Notes.

Chapter 10 Selected Legal Issues in Unclaimed Property Audits.

Lack of Nexus as an Audit Defense.

Dormancy Fees and Service Charges.

Expiration Dates and Other Contractual Limitation Periods.

Unclaimed Employee Benefits.

Unclaimed Property of Bankrupt Holders.

Mergers and Acquisitions: Successor Liability.

Asset Acquisitions.

Notes.

Chapter 11 How Not to Be a Victim of Unclaimed Property Fraud.

Psychology of Fraud.

Types of Fraudsters.

Mitigating the Risk of Unclaimed Property Fraud.

Note.

Chapter 12 Trends in Unclaimed Property.

Legislative Trends.

Non-Legislative Trends.

Conclusion.

Appendix A XYZ Corporation: Unclaimed Property Holder Questionnaire.

Appendix B Sample Policy and Procedure Manual.

Appendix C Sample Due Diligence Letter.

Appendix D State Unclaimed Property Office Contacts.

Appendix E Sample Audit Records Request.

Appendix F Summary of Current Gift Certificate Law.

Glossary.

Index.