Par Mark A. Paolillo
Par Susan Han
Par Jeff Henshall
As we previously reported, California established a voluntary compliance program for unclaimed property. This is the first time the California State Controller’s Office has offered a voluntary compliance opportunity since 2000, so this program has been eagerly anticipated. For California purposes, interest on past due property is assessed at 12% per annum. Holders of unclaimed property who are admitted to the program by California may be able to have interest waived on the property due to the state.
To be eligible for the program, holders of unclaimed property must comply with the following terms:
- The holder cannot be a subject of an examination or cannot have received notice of an examination of unclaimed property.
- The holder cannot be the subject of a civil or criminal examination related to compliance with the state’s unclaimed property statutes.
- The holder cannot have had an interest assessment under unclaimed property statutes within the past five years that remains unpaid.
- The holder cannot have had an interest assessment waived by the Controller in the past five years.
Participation in the program requires that the business participate in a training program provided by the Controller within three months of the notification of enrollment in the program. Once enrolled, the business will be required to review its books and records for at least the previous 10 report years and make a reasonable effort (due diligence) to notify owners of reportable property within the 30 days prior to submitting the required unclaimed property report to the Controller. An initial unclaimed property report is due to be provided to the Controller with six months of enrollment, to be followed by an updated report within seven months and 15 days of the initial report.
The California State Controller’s Office has released the timetable for this year’s enrollment program. As this is an ongoing program, applications will be continually reviewed for acceptance into the program for future report years.
The applicable dates for the initial enrollees in the upcoming report year are as follows:
- July 31, 2023 – Required training to be completed.
- September 30, 2023 – Due diligence to be completed.
- Before November 1, 2023 – Notice report to be completed.
- June 1–15, 2024 – Remit report and remittance to be submitted.
Please reach out to our team of unclaimed property professionals if you need assistance in this area. Our team has extensive experience identifying, quantifying, and mitigating unclaimed property risk for California and other states prior to reporting under a voluntary compliance program.
TECHNICAL INFORMATION CONTACTS:
Mark A. Paolillo
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