Unclaimed property is not a tax, but it might as well be.
The states treat the money collected as revenue.
Corporations have annual reporting duties and pay annually to the states. If they don’t comply, and even if the corporation does comply, they are subject to audits by the states for compliance with unclaimed property laws.
An Introduction to Unclaimed Property for the Corporate Holder
If you are new to unclaimed property, it is probably because your company received an audit letter from a state. Or perhaps you heard an audit horror story and are looking to avoid the same fate.
But first, you need to know the basics of escheatment. Yes, we have three names for the same thing – unclaimed property, abandoned property, and escheat. Sometimes, you’ll even see it abbreviated as AUP (abandoned and unclaimed property) or UP (unclaimed property).
It’s all the same process, so let’s get you caught up on the basics of unclaimed property.
Unclaimed Property Litigation
Most of the horror stories of unclaimed property audits are known because the stories are told through litigation in federal or state court.
Read about the cases that have brought us to this point in AUP. You’ll see trends and possibly where we are going in the future.