About Rosenberg Chesnov
Almost every business, regardless of its nature, can accumulate unclaimed property (UP) through routine operations. Such property includes overpayments, rebates, gift cards, payroll, accounts payable, securities, and mineral proceeds, among others. As startling as it might seem, states estimate that nearly 90% of companies don't report their unclaimed properties, leading to significant revenue for the states. This noncompliance, heightened by increased audit efforts post-Covid, can impose substantial financial and reputational risks on companies.
Unclaimed Property (UP) Defined:
UP refers to tangible or intangible financial assets abandoned by their rightful owners. Typical examples encompass:
Uncashed dated disbursements
Insurance payments or refunds
Gift cards or certificates
Abandoned safe deposit boxes
State Laws and Compliance:
Every US state, along with the District of Columbia, Guam, Puerto Rico, and the Virgin Islands, has its distinct unclaimed property laws. For instance, in New York, the Office of the State Comptroller manages the UP program, while in New Jersey, it's the Unclaimed Property Administration. Failing to report UP can lead to penalties, making it crucial for businesses to comply with these varying state mandates.
To sidestep the pitfalls of noncompliance, businesses should:
Regularly identify unclaimed property in their records.
Engage in due diligence to find property owners.
Maintain accurate property records.
Stay updated with changing laws.
Collaborate with professionals well-versed in UP laws.
Rosenberg Chesnov emphasizes the importance of understanding and managing unclaimed property risks.