Thursday, October 31, 2013

'Twas the Night Before Fall Reporting

‘Twas the night before Fall Reporting, and all through the firm,
Everyone in unclaimed property was starting to squirm.
Wire transfer instructions were given to disbursements with care,
In the hope that remittance confirmations soon would be there.

In state capitols, Treasurers smiled at the incoming proffers,
Knowing that millions would soon be in the states’ coffers.
Bob was in payables, and me with the CFO,
Was it all out?  Both of us wanted to know.

When down from the Controller there arose such a wailing,
I assumed there must be a late response to a due diligence mailing.
Away to accounting we ran down the hall,
Where Bob and I nearly tripped over the accumulated sprawl.

UP-1s, NAUPA codes, and Holder Reporting Guides,
Covered every flat surface with big stacks besides.
When, what led my stomach to churn and contort,
But hundreds of names that were left off the report.

When I asked how this many names could’ve been missed,
I was told they were still working off last quarter’s list.
Quickly, Bob and I each stifled a cry,
Certainly an exemption or two must here apply.

Airline miles? Lottery winnings? Stale B2B credits?
Perhaps just small balances with offsetting debits?
Alas, no, we would be late, and it might be gory,
With penalties and interest (both statutory).

There just wasn’t enough time to report all the names
Relationship codes, amounts less “lawful claims.”
We needed an answer, and the clock was still ticking,
Through each statute and reg, we just kept on clicking.

Then I noticed on the ledger I continued to assess,
All of the amounts listed were $50 or less.
My mood picked right up, and I started to sing:
We’ll just add it all up and report the whole thing!

Aggregate reporting -- that was the way!
We’d still get this report out by the end of the day!
We quickly revised, and added, and listed,
Everyone in tax helped, even legal assisted.

When it was ready, we unleashed the whole thing,
Breathing a sigh of relief (at least 'til next spring).
And I said to Bob, as the remittance flew out of sight,
Happy fall reporting to all, and to all a good night

Friday, October 11, 2013

Friday Lost + Found: D(minus) as in "Delaware", Money at the State Fair

COST Issues Unclaimed Property Scorecard, Delaware Still at Bottom -- The Council on State Taxation, a nonprofit trade association representing the interest of corporate state taxpayers, recently issued its second Unclaimed Property Scorecard.  The Scorecard is an effort by COST to compare and contrast the states' varying approaches to unclaimed property law compliance and looks at such topics as the use of contingent fee auditing firms, the treatment of penalties and interest and the availability of appeals processes and the like.  Once again, Delaware finds itself at the bottom of the list, registering a D-.  The highest grades were given to Virginia and Massachusetts, both of which received As.  If you are interested in unclaimed property, the Scorecard is worth a read.

Going to the State Fair Pays Off -- We've mentioned state fairs in this space as one of the places where states do unclaimed property outreach to potential owners of unclaimed funds.  This year, the Maryland Controller's office announced that its state and local fair outreach program resulted in excess of $300,000 being returned to rightful owners.  Whether its fried treats or found money, state fairs have something for everyone.


Tuesday, October 1, 2013

California Lowers Aggregate Reporting Threshold

The unclaimed property laws of most states provide for "aggregate reporting" of all items under a specified dollar amount.  For items under the threshold, the holder must still deliver the property to the state, but is not required to report the owners' name and address information.  The measure is generally considered to be an accommodation to holders - relieving them, for example, of the obligation to report dozens (or hundreds, or thousands) of lines of name and address information for "small balance" items from $0.01 to up to $50 or $100.

Of course, if the holder is not required to report name and address information to the state, the state will not have that owner identifying information for the purpose of reuniting owners with their property.  For that reason, the states' willingness to allow aggregate reporting has been criticized as inconsistent with the fundamental purpose of the unclaimed property laws - to have the state serve as custodian of an owner's money.

Perhaps in response to those criticisms, California is taking steps to reduce the aggregate reporting threshold, and thus, reduce the number of items that are reported to the state without name and address information. Under the current California Unclaimed Property Law, items under $50 are permitted to be reported in the aggregate (i.e., without owner name and address information).  Pursuant to Assembly Bill 212, which was signed into law last week, the aggregate reporting threshold was reduced to $25.  While this will increase the reporting burden on holders to some extent, the expanded availability of owner name and address information will also presumably aid owners in finding and reclaiming their money from the state.  The new law goes into effect on July 1, 2014.