Thu, Dec 20, 2018

Delaware Department of Finance Sends Notices to all Holders Enrolled in the Unclaimed Property Expedited Audit Program

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The Unclaimed Property and Tax Risk Advisory team at Kroll has learned that the Delaware Department of Finance sent a general notice to all Holders who elected to enroll in Delaware’s unclaimed property expedited audit program in December 2017. This is the second general notice sent to program enrollees, with the first sent in July 2018.

As we reported last year, the Delaware Department of Finance adopted Regulation 104 in October 2017, offering Holders under Delaware unclaimed property audit three choices to complete their audit: 

  1. Convert to the Voluntary Disclosure Program;
  2. Convert to an accelerated audit with a two-year deadline and with the potential for waivers of interest and penalty; or 
  3. Remain in the current audit program with interest and penalty to be assessed. 

Holders were required to decide by December 11, 2017.  

The December 2018 general notice serves as a reminder that one half of the allotted two-year period has expired and the Delaware Department of Finance reserves the right to expel any Holder from the expedited audit program that does not complete the examination on time. A copy of the letter may be viewed here.

The Delaware Department of Finance further asserts that:

  • Holders must respond to all record requests within 30 days, unless agreed upon in writing.
  • One half of the two-year work program must be completed at this time.
  • Holders in Phases III or IV of the program must complete the examination by the end of 2018.
  • Holders in Phase II of the program must complete the examination by the end of June 2019. 
  • Holders in Phase I of the program must complete the examination by the end of 2019.

Additionally, the Delaware Department of Finance states it will complete all examinations and provide all Holders examination reports by December 11, 2019, with preliminary examination reports provided by November 11, 2019. An offer is made to bifurcate any examination by property type or entity. All offers are contingent upon proper Holder cooperation. The notice states that the Department of Finance will work with any Holder in a reasonable and fair manner so long as communication remains open.  

Duff & Phelps is deeply experienced with the laws and regulations driving unclaimed property compliance in Delaware. We encourage all Holders enrolled in the Delaware unclaimed property expedited audit program to contact our team for a complimentary consultation.  

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