Unclaimed Property refers mostly to intangible items that for some reason or other remain uncashed, unapplied or otherwise unaccounted for. These items include, but are not limited to:
The States, always looking to bring in added revenue without increasing taxes, now require all corporations and businesses to file unclaimed property reports. The states also have taken a proactive stance, enacting over 5,200 statute changes affecting unclaimed property reporting and compliance. These changes deal with shortened dormancy periods and increased fines and penalties! Companies involved with mergers and acquisitions are now responsible for all unclaimed liabilities of the newly purchased businesses, sometimes totaling in the millions of dollars! Companies historically writing these items back into income would now experience an adverse effect on their financial statements, potentially damaging not only stock price but also a company’s hard-earned reputation. Delaware, among others, is auditing every company on their tax rolls, regardless of reporting history. The states have also increased the use of third-party auditors, who receive a percentage of everything they find.
The actual process of filing state reports and the corresponding remittances is quite easy, assuming you have all the information at your fingertips and all due diligence requirements have been fulfilled. Also, having an escheat expert on staff would help tremendously. Seriously, all states have escheat laws that while similar, are ALL different. The reporting requirements, due diligence requirements and dormancy periods differ from state to state. Additionally, these laws are ever changing. There are two major reporting periods, the Spring Reporting Period (12 jurisdictions) and the Fall Reporting Period (41 jurisdictions). If a company has never reported before, there are additional steps a company must take to reduce past liabilities. Knowledge of existing escheat laws provides the ability to minimize present and future “unclaimed exposure”. Knowing whom to report to is just as important as knowing when to report. Jurisdictional priority is a hot topic, and has been, for the states competing for your unclaimed dollars.
ECFS, LLC is the only full-service “Holder’s Advocate” escheat compliance firm that GUARANTEES* escheat compliance while generating cost-savings and has done so for 2 of the nation’s top 25 companies in the Fortune 500. Our program, developed over the last seven years, incorporates the myriad, ever changing state requirements allowing us to take full advantage of all beneficial laws in the company’s favor. Aggressive due diligence fulfillment is another source of saved revenue AND resources. ECFS, LLC is the only company that will look after the Holder’s interests while saving money, generating enough savings to offset the cost of our services while creating a new revenue center for most companies. We will also help streamline your other accounting functions as a “by-product” of becoming escheat compliant. We also offer expert legal assistance, when, not if, the state auditors appear. ECFS, LLC is not for every company, we specialize in major national and international businesses, but we do provide in-house assistance and process consulting for smaller firms wanting to get a firmer grasp on the escheat compliance process.>