Why should businesses care about unclaimed property?
It’s the law to track and report unclaimed property and you cannot count unclaimed funds as income. UP is governed and enforced at the state level with no two states having the exact same laws regarding UP. These laws are regularly changed and updated, requiring companies to stay on top of these legislative changes. Failure to follow unclaimed property laws can land business owners in hot water with costly fines and even jail time. With such high stakes at play, you would think organizations would stay on top of UP laws, however, that couldn’t be further from the truth. It has been estimated by states and audit firms that less than 20% of organizations are in full compliance with UP laws. Companies across numerous industries often don’t know they have an UP responsibility until they find themselves under audit or receiving a compliance invitation letter from a state(s).
Unclaimed property is a compliance concern often put on the backburner, but it is now being brought to light with governments eager to close the growing tax gap by embracing new technology and enforcement methods to guarantee they collect what is legally required. Ensuring your organization is in full compliance with UP regulations should be of utmost importance. Letting UP fall to the wayside may ultimately result in serious penalties and audits for your business. This can be avoided by working with the right partner to create a strategy that will streamline the UP compliance process.