In the world of unclaimed property reporting compliance, receiving a notice that the company will be subject to an audit is not only stressful but also often scary. However, these notices cannot simply be overlooked and ignored to deal with these unpleasant feelings. Instead, companies must take these audit notices seriously and do everything in their power to prepare for them.
Dunbar emphasizes to the companies they counsel that receive audit notices that they need to take these seriously. They will not go away on their own, so they deserve their utmost attention to resolve.
Most unclaimed property audits are conducted by state-hired contingency audit firms who are incentivized to produce numerous findings. Furthermore, these firms will often engage multiple states to sign on to the audit. It is not unusual for a company to be under audit by 20 or 30 states.
Once a company receives notice of an impending unclaimed property audit, it should appoint someone inside the organization to be the primary point of contact and lead it through the audit. However, there should be a committee of employees under the selected individual that represents payroll, accounts payable, accounts receivable, and any other departments that will be included in the audit.
Furthermore, companies should be aware that once they receive notice that an unclaimed property audit will be occurring, the audit itself may last a very long time. Typically, these audits generally last anywhere from 3 to 5 years. However, some may drag on even longer, lasting 8 to 10 years.
Unfortunately, these audits also commonly cost companies a lot of time and money, which is why it is so important that companies strive to report unclaimed property correctly the first time. In addition, they often require the attention of multiple internal and external resources, including legal counsel.
Dunbar recommends that companies do not rely solely on their internal legal counsel when facing such an audit. Instead, we urge companies to consider working with outside counsel that specializes in unclaimed property audit defense.
Companies will also find it beneficial to consider hiring and working with Dunbar. Our experienced consultants can assist companies with audit defense, providing supplementary services to those provided by legal counsel. Furthermore, they can work with companies to coordinate deliverables to the auditors, ensuring they have the necessary information and materials to help wrap up the auditing process as soon as possible.
Once companies have determined how they will approach this unclaimed property audit process, they need to gain a thorough understanding of which states are involved in it. After doing so, they should take time to review any potential unclaimed property liability to states not involved in the audit. If they determine that a liability exists and they are not currently compliant with the unclaimed property reporting process in another state, they should strive to become compliant as soon as possible.
Companies can do so by taking advantage of Voluntary Compliance Programs offered by states not currently engaged in the audit. Voluntary compliance programs offer companies an opportunity to get into compliance with reduced or waived penalties and/or interest.
Companies that are facing notices of unclaimed property audits do not need to face them alone. Dunbar is here to counsel these companies through the process. Our consultants will help them determine if entering a Voluntary Compliance Program is right for them, help them prepare all materials needed for the audit, and assist them in interacting with the auditors.
However, companies do not need to wait until they are facing an unclaimed property audit to seek out Dunbar’s services. Our consultants are prepared to help companies prepare and report unclaimed property on a yearly basis to ensure they remain compliant and never face an audit in the first place.
Dunbar is a reputable provider of unclaimed property compliance services, offering a comprehensive suite of solutions to help organizations remain compliant with all applicable laws. With a professional team with decades of experience, Dunbar is the ideal choice for businesses seeking a reliable and knowledgeable provider for their unclaimed property compliance needs.
