Unclaimed Property Alert – Delaware VDA Invitation Date Announced

As the holiday season approaches, organizations should be vigilant with their mail. The next round of the Delaware unclaimed property Voluntary Disclosure Agreement (“VDA”) program invitations are scheduled to be mailed around November 15th, 2024. Businesses receiving these letters should take them seriously. Ignoring them could lead to significant risk.

Understanding the Delaware VDA Program

The Delaware VDA program is part of a broader system the state employs to enforce compliance with unclaimed property laws. These laws require businesses to report and return unclaimed property, such as inactive bank accounts, uncashed checks, or customer credits. The state has implemented various enforcement strategies, and the VDA program allows companies to voluntarily disclose unclaimed property while avoiding hefty penalties.

Key Dates to Remember

The VDA invitation letters will be mailed around November 15, 2024, with a 90-day window for response. Missing this deadline can trigger an unclaimed property audit, a situation that can have serious financial implications. Companies facing audits have seen interest and penalties reach up to 20% of the unclaimed property identified, alongside significant administrative headaches.

Organizations that do not receive an invitation are still eligible to apply to the VDA program.

Benefits of Participating in the VDA Program

The advantages of enrolling in the VDA program are substantial:

1. Reduced Liability: Companies that successfully complete the program receive a waiver of interest and penalties.

   
   

2. Structured Resolution: The program offers a clear path to address unclaimed property issues. Businesses can engage directly with state officials and their auditors to resolve discrepancies more smoothly.

   
   

However, it is essential to acknowledge that the VDA program may not suit every organization's needs. Conducting a thorough internal review is crucial to assess whether it aligns with specific business circumstances.

Considerations Before Enrolling

Before committing to the VDA program, businesses should evaluate their unclaimed property situations. Key considerations include:

1. Historical Compliance: Review your company's record regarding unclaimed property laws. A history of non-compliance might attract more scrutiny during audits, making participation in the VDA essential.

   
   

2. Legal Ramifications: Compliance regulations can evolve, affecting companies differently based on their structures. Joining the program can eliminate a company's ability to challenge Delaware's process. Seeking advice from unclaimed property compliance specialists can clarify potential impacts.

   
   

Risks of Ignoring the Invitation

Disregarding the invitation from the state about the VDA program can lead to severe consequences. Key risks include:

1. Unclaimed Property Audit: Not responding within the designated period may prompt an audit.

   
   

2. Financial Exposure: Failing to address unclaimed property can expose organizations to significant financial liabilities, particularly if overlooked properties come to light during an audit.

   
   

How Advisely Can Help

Navigating the complexities of unclaimed property laws is challenging. At Advisely, our professionals can assist you in understanding your options related to the VDA program. They bring significant experience and can help clarify the implications of various pathways for your organization.

Managing unclaimed property obligations does not have to be overwhelming. With the correct strategies and expert support, businesses can ensure compliance and avoid unnecessary risks.

Contact eburke@adviselyllc.com for additional information.