Posted on Friday, 18th November 2011 by Keane Unclaimed Property Team

Last week, Keane Senior Manager Pam Wentz and Vice President Scott Regan spoke at the Tax Executive Institute’s Philadelphia Chapter Conference on state and local tax trends and strategies. In an effort to further educate tax professionals about the implications of taxes and unclaimed property, Pam’s presentation was focused on federal and state rules and regulations, the current state of unclaimed property affairs, obligations of businesses when it comes to reporting, and the different types of audits companies can face for failure to fully report unclaimed property obligations – or failure to report them at all. Pam also outlined best practices businesses can follow to minimize audit risk and liabilities.

While unclaimed property isn’t considered a tax, it often falls within the purview of the tax department. Unclaimed property looks like a tax because there is an annual filing requirement governed by state law. It feels like a tax because unclaimed property compliance requires ongoing monitoring of changes in laws and regulations making taxes and unclaimed property reporting more complex than ever. Therefore, to ensure that companies are safe from an audit and in full compliance, tax executives and their departments need to have a firm grasp on current rules and regulations as well as the reporting process.

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Posted on Wednesday, 29th June 2011 by Keane Unclaimed Property Team

Please be advised that on Friday, June 17, 2011, the Governor of Texas signed HB 257 into law, making changes to the dormancy period for certain banking products and utility deposits and dramatically changing the Texas unclaimed property reporting structure timeline. The following summarizes the new changes in the Texas laws:

Dormancy Reductions:

1) The dormancy period for checking/savings accounts and matured CDs has been reduced from five years to three years.

2) The dormancy period for money orders has been reduced from seven years to three years.

3) The dormancy period for utility deposits (defined as a refundable money deposit that a utility requires a user of the utility service to pay as a condition of initiating the service) has been reduced from three years to 18 months.

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Posted on Thursday, 2nd June 2011 by Keane Unclaimed Property Team

Keane consultants continue to lend their unclaimed property compliance expertise and advice to the media. This week, Bankers Digest included an article written by Valerie Jundt, the managing director of our Consulting & Advisory Services group. The article (click here to read), titled, “Financial Institutions Face Set of Regulations for Unclaimed Property,” discusses how financial institutions can misstep when it comes to unclaimed property reporting. In her article, Valerie discusses potential unclaimed property trouble for financial companies including:

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Posted on Friday, 13th May 2011 by Keane Unclaimed Property Team

State Enforcement Update From Keane  – May 13, 2011

On April 25th 2011, Keane reported that California’s State Controller announced a large settlement with life insurer, John Hancock, regarding an insurance company unclaimed property audit.   In his announcement, State Controller Chiang asserted that insurers are not doing enough analysis of dormant accounts; and therefore are engaging in a practice of improperly failing to pay death benefits to the beneficiaries of life insurance policies.  It appears that the issues uncovered during California’s audit concerning the life insurer’s practices and compliance with unclaimed property laws have caused an escalation of the attention paid by the States to the insurance industry.  It has now been reported that 37 states have hired the third party audit firm, Verus, to determine whether life insurers are doing enough to find out whether life insurance policy insureds have died, locate the beneficiaries when the insureds have died, and turn unclaimed property over to the appropriate state agencies.
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Posted on Friday, 6th May 2011 by Keane Unclaimed Property Team

On Tuesday, May 3rd, Texas substantially amended HB 257 proposing, among other things, to adjust the due dates for Texas unclaimed property rules, reporting, and delivery.  Previously, Texas’ reporting due date was November 1st with a cut-off date of June 30th.  The amended bill proposes a due date of July 1st with a cut-off date of March 1st.  Accordingly, Texas’ due diligence statute is amended to match the new deadline.

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Posted on Thursday, 14th April 2011 by Keane Unclaimed Property Team

We’ve seen the word “escheatment” achieve a new level of notoriety over the past several months, and it’s largely due to the recent wave of unclaimed property penalties and notices that have been sent out by the State of California Controller’s office.

These interest assessment notices are the result of a recent internal review by the Controller’s office to identify “past due” property that had been reported and was included on the unclaimed property reports filed since 2007. Read More »

Posted on Monday, 21st March 2011 by Keane Unclaimed Property Team

Last week, the Seattle Post-Intelligencer reported that Costco is suing the State of Washington over $3.2 million in unclaimed rebates. The lawsuit is in response to an order mandated by the state in February that Costco owed more than $3 million in unused rebates. The state says the funds belong in a state-managed program for consumers who want to claim the rebates. In Costco’s suit, however, the company alleges it should not have to turn over the requested funds as it engaged a third party rebate house to manage its rebate program. Because the company does not retain the amounts at issue, it doesn’t believe it owes the state anything.

The $3.2 million represents unclaimed Costco rebate from 2004 to 2010, plus interest.

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Posted on Thursday, 3rd March 2011 by Keane Unclaimed Property Team

Faced with a massive budget shortfall and a no-new-taxes sentiment, Texas lawmakers are considering several options to generate revenue; one major option is unclaimed property reporting.  A recent San Antonio Express article titled “Lawmakers try to soften cuts,” outlines some ways Texas plans to try to protect the state budget without violating the no-new-taxes pledge. The options include deferring billions in state payments, speeding up tax collections, offering amnesty on penalties to laggard taxpayers and shortening dormancy periods for some types of unclaimed property.

Some of these measures have already been filed and others should take shape prior to the March 11th bill-filing deadline.  In the next several weeks, the House Ways and Means Committee will be holding hearings on proposals including House Bill 257, which could potentially produce $72 million by shortening dormancy periods for unclaimed property such as utility deposits, money orders, and certain types of bank accounts.

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Posted on Wednesday, 16th February 2011 by Keane Unclaimed Property Team

Keane VP, Sonia Walwyn, writes about the impact on CPAs in February’s The CPA Journal

A CPA’s knowledge and understanding of unclaimed property accounting requirements and risk factors can be invaluable in understanding the potential impact to a client’s financial statements. When not correctly managed and reported, the historic unclaimed property liability coupled with the risk of state audits – and subsequent fines and penalties for non-compliance – become material to your annual reviews, findings, and ultimate opinions. And, given the economic situation in many states, unclaimed property accounting audits are occurring more frequently than ever before.

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Posted on Thursday, 16th December 2010 by Keane Unclaimed Property Team

WINTER 2011 (Current through 12/13/10)

Gift Card Escheatment Regulations

CALIFORNIA GIFT CARD ESCHEATMENT
SB 885
Introduced 1/19/2010, Passed 8/25/2010, Vetoed by Governor 9/24/2010
This bill would require that a gift certificate with a cash value of less than $10 be redeemable in cash for its cash value, and would require that a gift certificate contain a statement to that effect. This bill would also delete the exceptions to the prohibition on the sale of a gift certificate that contains a dormancy fee. Read More »