We’ve Moved

MarketSphere Unclaimed Property Specialists is proud to announce the launch of our new site.  Here you will find up-to-date resources such as white papers and notifications and full descriptions of our service offerings.

http://www.unclaimedpropertyspecialists.com/

Additionally, we are excited to bring to you a new blog which will be updated every week with industry news, statute changes, court rulings and more, in hopes of keeping you continually apprised of industry developments.  We hope you enjoy!

http://www.unclaimedpropertyspecialists.com/blog

Featured Leader and Whitepaper

With states increasingly enforcing their unclaimed property provisions and the number of state and third-party audits continuing to rise, MarketSphere has uniquely positioned itself to help you navigate the audit process and negotiate the best possible final assessment for your organization.  One such way we do this is by focusing only on Unclaimed Property, not other corporate functions such as Tax and Accounts Payable.  In addition to our exclusive focus, we also understand the importance of a knowledgeable staff with significant experience within the Unclaimed Property field as audits become more complex, but final outcomes more negotiable.

Once such member of this team is Director  Jennifer Arias.  With more than fifteen years under her belt, including eight years of diverse public accounting experience and seven years of experience in performing financial and operational audits for two major investment banking firms, Jennifer has been invaluable in the formation of our National Audit Defense Practice.  Jennifer has been actively involved in delivering unclaimed property services to clients across many industries, including analyzing overall compliance with applicable unclaimed property laws, and providing audit defense services for companies undergoing multi-state contingent fee examinations. Additionally, Jennifer has assisted companies with identifying planning opportunities and helping them to achieve overall compliance with their unclaimed property reporting responsibilities.

In addition to her client engagements, Jennifer has also been very active in speaking engagements and has become a recognized though leader on unclaimed property audits, voluntary disclosures, and risk assessments and remediation.  Recently, Jennifer authored a White Paper which details, amongst other things:

• The enforcement efforts by the states;
• The likelihood of getting audited;
• The audit process itself;
• The ways to decrease your audit and assessment risk; and
• The strategies your organization can use to minimize your negotiated settlement once the audit commences.

For more information regarding MarketSphere’s National Audit Defense Practice, feel free to contact Jennifer directly at (703) 620-2758.  Additionally, her White Paper, for a limited time, can be accessed free of charge HERE.

One-time Amnesty Programs Ending

MarketSphere would like to extend a reminder that the one-time Indiana and Pennsylvania amnesty programs we blogged about previously are set to conclude on October 31st.  Once again, these states are offering this great opportunity for holders to come into compliance with their states’ escheat provisions, regardless of past noncompliance.  With most all states now enforcing penalties and/or interest on past-due property and becoming increasingly aggressive with audits, you certainly want to take advantage of this opportunity for full amnesty.

Feel free to contact MarketSphere at 816.559.0646 for more information on these programs and how to be accepted into them before it is too late!

Update: Michigan Reporting Change

As we blogged about last week, the State of Michigan, attempting to find ways to decrease their projected $450MM budget deficit for the upcoming FY, had proposed significant changes to their escheat provisions for future reporting years.  Since that time, Michigan legislators have indeed signed that bill into law.

While changes in unclaimed property statutes are very common, Michigan H.B. 6421 will impact reporting entities’ policies and procedures considerably.  First, as many states are beginning to do in attempt to balance their budgets, Michigan decreased their dormancy periods for most all property types from 5 to 3-years, thus expediting escheat to the state.  While the original bill had proposed decreasing the dormancy period for traveler’s checks similarly, this clause has been reversed and will remain as is (15-years) – this is likely due in part to several lawsuits that have been filed against states for reducing dormancy periods for traveler’s checks, citing violations of the U.S. Constitution’s Due Process Clause.

While the dormancy changes are significant, they do not impact holders’ unclaimed property processes.  However, another amendment upheld in this bill does.  That is, Michigan now mandates, beginning January 1, 2012, reporting entities to submit their unclaimed property report and remittance on or before July 1 of each year, rather than November 1.  In addition, the dormancy cutoff will indeed be March 31 of each year.  Both the deadline and cutoff established by the State of Michigan are the first of their kind amongst the 54 U.S. reporting jurisdictions.

Lastly, this bill requires that holders file a supplemental report to the State of Michigan prior to July 1, 2011, for the period ending March 31, 2011.  This can be thought of as a “catch-up filing” used to accelerate the escheat of property that became dormant because of the changes cited above.  A similar supplemental file was proposed by AZ last year for submission by June 1, 2010.

Clearly, the bill signed into law by the State of Michigan further increases the complexity of the Unclaimed Property reporting function for organizations across the world.  This has been the trend, and will continue to be the trend, as the Uniform Unclaimed Property Act only goes so far in reducing the disparate reporting requirement state governments propose.   A similar increase in complexity will soon take effect in the State of New Jersey where legislators continue to work out statutory changes regarding the escheat of stale gift cards, including the repeal of their gift card exemption and the introduction of a “third-priority rule” which mandates, in some cases, the escheat of gift cards to New Jersey if the card was sold in New Jersey…further details will be provided once they become clear.

Michigan Reporting Change

In search of ways to decrease their budget deficit, the State of Michigan has proposed several changes to the way unclaimed property must be reported.  While the bill has not yet been approved, it should certainly be on holders’ radars as it would drastically increase the complexity of their unclaimed property reporting function.

Michigan H.B. 6421, amongst other things, would reduce dormancy periods for various property types, thus expediting the time in which stale-dated property would be remitted to the state.  The most significant of these changes is to traveler’s checks, a dormancy period reduction from 15 to 3-years.

The most burdensome modification, however, is the report and remittance deadline change.  As it stands now, the unclaimed property return and remittance are due to the state by November 1.  The proposed change would establish a July 1 deadline, utilizing a March 31 cutoff for determining dormancy.  This revision would be problematic in that it would be the only state with this cutoff/deadline structure and also because much time would need to be dedicated to coming into compliance the year the bill takes effect.

Due to the fact this bill would significantly changes internal processes for almost all holders, we will continue to watch it closely as it passes through the Michigan Legislature – updates will be provided as we receive them.

Unclaimed Property Fall Compliance: Is Your Organization Ready?

It is that time of year again where the states are requiring you to take a look at your unclaimed property obligations and perform last contact mailings in preparation for filing your fall 2010 unclaimed property reports.  The following lists some helpful reminders and tips to ensure you meet the fall filing deadlines with ease: 

• Ensure that last contact mailings (due diligence letters) has been processed and mailed according to each state’s statutory requirements, including deadlines, formats, and thresholds.
• Refer to each state’s website for the most current holder reporting forms and instructions.  Following reporting instructions carefully ensures that you include all the necessary items/documents in your reporting package.
• Provide all requested data fields on your report; the states are strictly enforcing completed reports and are beginning to reject reports with missing information (e.g. social security numbers).
• Ensure that you have included all applicable property types for your industry.
• Encrypt your reports for the states that have taken the steps toward extra security.
• Take advantage of the states that allow for online reporting – this can be a time saver and ease the reporting/delivery process.
• Report on time – many states are enforcing automatic penalty and interest provisions for late filings so be sure that your reports and remittances are submitted prior to the statutory deadline.  For the majority of fall states, this means November 1^st.
• Submit “negative reports” when necessary.  Even though you may have nothing to report in a state, some states require forms to be filed.
• Remember to sign the reports prior to mailing them! 

As always, if you have any reporting questions or need assistance with your filings, please give MarketSphere a call at (816) 559 – 0646 to speak with a member of our compliance team.

Statute Alert!

One of the major difficulties that your Unclaimed Property function might face is the ever-changing unclaimed property laws and statutes that govern escheat.  While meandering through the “jurisdictional jungle” can be quite tortuous, having a current, accurate, and complete knowledge of your reporting requirements is vitally necessary.  Falling out of compliance exposes your company to risk in the form of penalties and interest and state audit, especially considering the aggressiveness many states are now showing due to budget cuts.

One such evolution in reporting requirements occurred early this month when the State of New Jersey approved a bill which adjusts dormancy periods for presumption of abandonment.  New Jersey also redefined what constitutes a “gift card,” associating them with a 2-year dormancy period, thus making gift cards escheatable property beginning this reporting year.  Among other new gift card regulations, New Jersey now mandates that issuers of gift cards must obtain owner information from the buyer, including address detail.  In the event that address information is not obtainable, including years prior to the passing of this bill, New Jersey indicates that the address should be assumed to be the address of the place where the gift card was sold, if that place was in New Jersey.  Clearly, New Jersey has taken a position counterintuitive to the “secondary rule” established in the 1965 Supreme Court ruling of Texas v. New Jersey, 379 US 674 – an attempt to “modernize” unclaimed property reporting requirements as New Jersey indicates.  For more information regarding this provision and others in NJ Unclaimed Property Bill A3002, click HERE.

As can be seen, unclaimed property statues are continuously changing.  While keeping up with these changes can be quite time-consuming and confusing, it’s of vital importance in keeping your risk profile in check.   For more information on how any of the recent statute changes, including the New Jersey bill, affects your company, feel free to contact MarketSphere at (816) 559 – 0646.

MarketSphere to Attend UPPO Conference

MarketSphere’s Jennifer Arias and Paul MacCready will be attending the Unclaimed Property Professionals Organization (UPPO) Regional Conference next week. The event, being held in Minneapolis, Minnesota on July 19th and 20th, will include a variety of unclaimed property seminars, including unclaimed property basics, education on due diligence, annual reporting, rebates and gift cards, and handling a state audit.

Jennifer and Paul hope to see and speak to all of you attending the conference…please mention you saw our blog!

Jennifer Arias has been actively involved in delivering unclaimed property services to clients across many industries, including analyzing overall compliance with applicable unclaimed property laws, and providing audit defense services for companies undergoing a multi-state contingent fee examination. Additionally, Jennifer has assisted companies with identifying planning opportunities and helping them to achieve overall compliance with their unclaimed property reporting responsibilities. Jennifer has over fifteen years of professional experience including eight years of diverse public accounting experience and seven years of experience in performing financial and operational audits for two major investment banking firms.

Paul MacCready specializes in providing unclaimed property consulting and advisory to clients across the nation. His specialty is Health Care – with close to 30 years in the industry – Paul helps companies in a heavily scrutinized industry uncover hidden income opportunities. Prior to joining MarketSphere, Paul was the Chief Operating Officer at Coventry Health Care of Kansas and responsible for a $500M managed health care business serving commercial, Medicare and individual clients. Most notable about his career is its breadth: Paul has hands on experience with sales, operations, account management, risk underwriting and information technology.

Pennsylvania Amnesty Program

Similar to the one-time Indiana Amnesty Program we blogged about in March, Pennsylvania is now offering reprieve for holders that are out of compliance with Pennsylvania’s unclaimed property reporting requirements.  This Program will be open to all first time filers and holders who have gaps in their historical filings.  However, companies that are under self-audit or audit by the Pennsylvania Treasury will not be eligible.

 While this unique offering allows holders to come into compliance with Pennsylvania without the risk of being assessed penalties and interest on past-due property, it is only available until October 31 ,2010.  For more information on how your organization can utilize this opportunity, feel free to contact MarketSphere at (816) 559-0646.

Free Webinar and Reference Materials

In the past several months, MarketSphere has been offering several free webinars to anyone interested in hearing more about the unclaimed property field, annual reporting responsibilities and various other topics. For those of you who have missed those webinars, you can now find the taped sessions on our website: www.justrightcompliance.com.

Most recently, MarketSphere’s Jamshid Ebadi and Dave Bourgoin presented on how your company can sort through your technology options related to tracking and reporting unclaimed property. This topic is of particular interest as we’ve seen many changes in the systems that are available on the market, with some no longer being offered, thus forcing a burdensome software selection process.

In addition, MarketSphere offers several case studies and white papers addressing topics such as managing audits, mitigating risk of an initial filing, and reducing your company’s annual liability through liability reduction analysis.

As always, MarketSphere thanks you for tuning into our blog and taking the time to utilize our free webinars and reference materials. Stay tuned as MarketSphere will continue to release new topics many of you have requested to be addressed.