Accounting for Unclaimed Property by ProQuest


The normal, everyday operation of a business results in the generation of obligations that can become abandoned and unclaimed property, which is then subject to compliance requirements pursuant to state law. When not correctly managed and reported, a historic unclaimed property liability coupled with the risk of state audits -- and subsequent fines and penalties for non-compliance -- can become a material issue. All US states have abandoned or unclaimed property laws that require companies, both public and private, to report and remit all liabilities owed to third parties on an annual basis once the prescribed statutory number of years, known as the "dormancy period," has expired. The responsibility for reporting unclaimed property falls within the purview of different groups within an organization but generally resides within the tax department, even though unclaimed property is not a tax. While there are no silver bullets in terms of avoiding an unclaimed property audit, them are many simple red flags that can be eliminated.

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