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By Scott Regan, Unclaimed Property | June 22, 2020

The Altus Group Unclaimed Property team has learned that the State of Delaware has extended its deadline to enroll in its unclaimed property voluntary disclosure agreement program (VDA) to July 18th, 2020.

As we noted in February, the Delaware Secretary of State (DE SOS) began its 2020 enforcement campaign by mailing over 100 “invitations” to companies incorporated in that state on February 20th, 2020. Recipients, by statute, must reply to a DE SOS unclaimed property VDA invitation within sixty days or they will be referred to the Delaware Department of Finance (DE DOF) to be notified of unclaimed property audit.

Due to the COVID-19 crisis, the DE SOS previously extended the deadline for replying to May 22nd, 2020.

As nearly all companies are incorporated in Delaware, most US corporations are a target whether they have a history of compliance or not. Both the VDA and audit programs apply aggressive extrapolation techniques to extract large and previously unreserved unclaimed property liabilities from Delaware incorporated companies that cannot produce 15 years of researchable records.  However, as we discussed in May, the VDA program is vastly more favorable to companies.

In an unprecedented move, the DE DOF, having received from the DE SOS the names of the corporations that failed to reply to the February DE VDA invitations, contacted those companies via mail on June 18th 2020 offering one final extension to July 18th, 2020 to enroll in the VDA program.  The DE DOF acknowledged that the crisis likely impacted notified companies’ ability to respond. Those companies that do not respond will receive notification of audit.

As we discussed earlier this month, the COVID-19 crisis has caused devastating revenue declines for state governments that we expect them to mitigate, in part, with increased unclaimed property enforcement and collections.  The DE SOS mailed approximately 600 invitations in 2019 and we expect them to begin mailing new invitations shortly.

Any company who receives an invitation from the DE SOS is encouraged to contact the Altus Group Unclaimed Property Team for a commentary consultation.  Even if a letter has not yet been received, best practices suggest that Delaware incorporated companies take proactive measures to minimize exposure.

At Altus Group we are deeply experienced in these matters and have affected dramatically positive outcomes for our clients.  We will be pleased to talk over possible options and strategies for a response.

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