In continuing its efforts to cast a wide net to pursue participants for the voluntary disclosure program, Delaware has sent out another scheduled round of letters requesting voluntary compliance. The Delaware Voluntary Disclosure Agreement (VDA) is a type of amnesty program in which companies can disclose previously unreported and currently due unclaimed property in a self-review process within the state’s VDA guidelines, in exchange for a waiver of interest and penalties. Delaware’s VDA program, like numerous other VDA or amnesty programs, is also administered and reviewed by third parties, as disclosed in the outreach letters.
Delaware has the most robust unclaimed property enforcement program in the country, often targeting companies incorporated in that state for audits that typically last multiple years and become a drain on internal resources because of the significant volume of documents requested. As required by state law, and as part of a periodic and ongoing effort, Delaware periodically sends out VDA program invitations. In line with dates published on the state’s website, the first wave of letters was sent on February 24, 2023, and this latest wave of letters was sent very recently on July 14, 2023. In prior waves of letters, anywhere between 50 to more than 100 letters have been mailed out.
According to the invitation letters, if a company receives one of these invitations and does not respond within 90 days (previously 60 days), the company will be referred to the Delaware Department of Finance for audit. In other words, if ignored, the “invitation” letters are a first step towards a potential audit.
Companies should check the mail and be on alert in mid-July for the arrival of an invitation letter, sent by the state via certified mail and usually addressed to the CEO or CFO, to ensure that proper action is taken on a timely basis.
Although the Delaware program is a “voluntary compliance program,” there are complexities in the review process where Ryan’s team of experts can provide insight, efficiencies, and value. These form letters could easily be overlooked, with significant consequences to the company. If your company receives a Delaware VDA invitation letter or similar correspondence from any other state, please contact one of Ryan’s unclaimed property professionals to discuss appropriate options for responding to the communication.
TECHNICAL INFORMATION CONTACTS:
Mark A. Paolillo
Principal
Ryan
857.288.1976
mark.paolillo@ryan.com
Susan Han
Principal
Ryan
442.244.2447
susan.han@ryan.com
Jeff Henshall
Principal
Ryan
404.682.1200
jeff.henshall@ryan.com
Christopher Jensen
Principal
Ryan
469.399.4142
christopher.jensen@ryan.com
Sonja Roman-Molina
Principal
Ryan
570.350.2722
sonja.roman@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.