Get Ready for the Countdown: Final Delaware Unclaimed Property Regulations Published

By , and on October 5, 2017

On October 1, 2017, the Delaware Department of Finance published final regulations in the Register of Regulations repealing its former unclaimed property regulations and promulgating a new reporting and examination manual.  See 21 DE Reg 336 (Oct. 1, 2017).  The final reporting and examination regulation contains no substantive changes from the revised version that was re-proposed on August 1, 2017.  As published, the regulations are set to be adopted and take effect on October 11, 2017.

This development is significant for holders that are currently under audit and considering enrolling in the Secretary of State’s Voluntary Disclosure Agreement Program (VDA Program) or converting the audit to an “expedited audit” because October 11 marks the start of the 60-day period allotted for holders to notify the Secretary of State and/or State Escheator of their intention.  See 12 Del. Code § 1172(b)-(c).  At the conclusion of this 60-day period, any holder that has not provided a notice of intention will not be permitted to elect the respective option.  Specifically, the notice must be in writing and received in a form and manner provided by the State Escheator and/or the Secretary of State within the 60-day period permitted by statute.  To be eligible for enrollment in the VDA Program, the audit must have been authorized on or before July 22, 2015.  However, to convert to an expedited audit, the audit must have been authorized before February 2, 2017.

Practice Note

If you are currently caught up in a Delaware unclaimed property audit, the expiration of your window of opportunity to elect another route is right around the corner and the time to act is now.  This comes in light of the news that the Secretary of State will be mailing notices to potential audit targets in two weeks—which also contain a 60-day VDA program enrollment deadline.  Holders are encouraged to contact the authors to discuss the implications of each option and whether VDA Program enrollment or expedited audit conversion makes sense for your audit.

Diann Smith
Diann Smith focuses her practice on state and local taxation and unclaimed property advocacy. Diann advises clients at any stage of an issue, including planning, compliance, controversy, financial statement issues and legislative activity. Her goal is to find the most effective method to achieve a client's objective regardless of when or how an issue arises. Diann emphasizes the importance of defining a client's objective - whether it is finality of a frequently audited issue, quick resolution of a stand-alone tax liability, or avoiding competitive disadvantages in the application of a tax. The defined objective then governs the choice of the path to a solution. Read Diann Smith's full bio.

Eric D. Carstens
Eric D. Carstens focuses his practice on state and local tax matters, assisting clients with state tax controversy, compliance and multistate planning across all states for a variety of tax types and unclaimed property. Eric engages in all forms of taxpayer advocacy, including litigation, legislative monitoring and audit defense. He works closely with several of the Firm's taxpayer coalitions focused on specific state tax policy issues such as the taxation of digital goods and services and unclaimed property. Read Eric D. Carstens' full bio.

Stephen P. Kranz
Stephen (Steve) P. Kranz is a tax lawyer who solves tax problems differently. Over the course of his extensive career, Steve has acquired specific skills and developed a unique approach that helps clients develop and implement holistic solutions to all varieties of tax problems. He combines strategic thinking with effective skills for the courtroom, the statehouse and the conference room. Read Stephen Kranz's full bio.




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