Delaware law authorizes the OUP to verify the information contained in filed unclaimed property reports. The OUP also is authorized to contact Delaware companies that have not filed unclaimed property reports and request verification that such a report is not required. The OUP recently began implementing this authority by sending notices to companies informing them that they have been selected to complete a verified report for the 2022 calendar year. The verified report process is not an examination or audit.
Completing the verified report form
Companies complete the verified report by confirming the accuracy of the unclaimed property report filed with Delaware for the 2022 calendar year or by stating that they have additional unclaimed property to report to the state. If an unclaimed property report was not filed for the 2022 calendar year, a company must confirm whether an unclaimed property report was required. The verified report form must be signed by a corporate officer and the signature must be notarized. Additionally, companies are required to list the legal entities included in the verified report and state whether the company has written unclaimed property policies and procedures, and if so, provide a copy.
Crowe observation
Companies that identify unreported unclaimed property due to Delaware can file a report or supplemental report for the 2022 calendar year. Per the OUP’s current administrative policy, interest and penalties will be waived on any property reported late during the verified report process.
Companies must acknowledge receipt of the verified report notice within 30 days and must submit the completed verified report to the OUP within 180 days. Because the OUP has only one year to complete the verified report process, it will not provide any deadline extensions.
Consequences of failing to meet the verified report deadlines
Companies that fail to timely complete a verified report will be referred to the Delaware Secretary of State’s VDAP or will be subject to an OUP audit.
Crowe observation
Initiating an unclaimed property audit as a result of a failure to complete a verified report is a shift from the standard OUP process. Companies previously were provided an opportunity to make a voluntary disclosure of unreported unclaimed property prior to being audited.
In contrast to the limited information required to be provided as part of the verified report process, companies enrolled in the Delaware Secretary of State’s VDAP or undergoing an OUP audit are required to provide detailed information about their unclaimed property history and are subject to a liability assessment going back 15 years.
Looking ahead
Companies that receive a verified report notice for 2022 should act quickly to acknowledge receipt of the notice, evaluate their compliance with Delaware’s unclaimed property law, and timely submit their verified report to the OUP. Companies that discover potential noncompliance should consult with their adviser to determine the best course of action. Companies also can use this notice as an opportunity to review current unclaimed property policies and procedures and make changes as warranted.
