Delaware is actively targeting companies for Unclaimed Property audits. If you receive a letter from Delaware inviting you to participate in their Voluntary Disclosure Agreement (“VDA”) Program, don’t ignore it. Instead, reach out to us to schedule a call with our Unclaimed Property experts.
Traditionally, Delaware has been the most aggressive state when it comes to unclaimed property compliance and with good reason. Based on the priority laws set forth by the Supreme Court and the fact that more than 60% of all corporations are incorporated in Delaware, the State brings in hundreds of millions of dollars on an annual basis. Even in our current COVID climate of reduced corporate revenue and layoffs by the thousands, the State is committed to enforcing compliance. They have confirmed VDA notices will be issued at various intervals throughout 2021.
In 2017 the Delaware legislature issued SB 13. One facet of this bill determined that a company could not be audited by the state unless they received a VDA invitation letter first. While the letter is very friendly in nature, consider it a warning. If a company does not respond to this letter and enroll in the state’s VDA program within 60 days, a costly and time-consuming audit could ensue. There are several advantages to filing a VDA (as opposed to being audited) including no interest and penalty, and the company and its advocate is allowed to drive the process in a VDA, like a self-audit.
If you are incorporated in Delaware, please be on the look out for a letter that resembles this sample. Do not throw away this notice. We urge you to take the matter seriously and contact the experts at Clearview if you have any questions or need guidance regarding appropriate next steps.