Don’t Let Lack of Knowledge Cost You: U/P Compliance for A/R
In the difficult economic climate, state governments have intensified escheatment enforcement efforts costing some businesses millions of dollars in liability including non-compliance penalties. These enforcement efforts include increasing the number of audits, hiring more third-party auditors, expanding the types of transactions reviewed and scrutinizing annual reports for potential under-reporting. Accounts receivable items are often the target of review and scrutiny including returned merchandise credits, customer overpayments, unused refunds, and unapplied cash.
Further, some states have changed their laws in order to capture additional unclaimed property revenue. During the past few years, decreasing dormancy periods (the time period a credit must be unused to trigger the escheat requirements) has become a common method for generating revenue to offset state budgetary shortfalls. Once the most common dormancy period, the 5 year period is rapidly being replaced with 3 year dormancy periods for most accounts receivable related unclaimed property.
Now more than ever, the accounts receivable professional must be informed about unclaimed property obligations and the trends in enforcement. To minimize escheatable property and effect risk-proof compliance, the practitioner must understand the types of transactions that create unclaimed property. As the obligations change and/or compliance trends shift, it is important that up-to-date information be reviewed and that policies and procedures modified to avoid liability and limit risk.
November 1st, for the majority of states, is the deadline for corporate unclaimed property reporting. Lack of or inaccurate compliance can be costly. Are you prepared?
About Karen Anderson
Karen Anderson has been involved in the unclaimed property industry for 22 years and has been in the forefront of the movement to provide holders with practical compliance and penalty avoidance training and education. In her current position, Karen assists UPRR in maintaining compliance-related data, guides UPRR clients in achieving and sustaining compliance and provides holder education via the UPRR website, speaking engagements and publications.
Unclaimed Property Recovery and Reporting, LLC (UPRR) has been a leader in Unclaimed Property services since 1996, customizing solutions to minimize liability and risk for organizations by locating owners, motivating them to action, and reconnecting them with their assets. In addition, UPRR has developed a proprietary escheat compliance system that meets or exceeds the reporting requirements of the 54 U.S. unclaimed property jurisdictions and territories. UPRR assists businesses in compliance with the due diligence and reporting requirements.