August 2012
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In this issue

Achieving Success

A client engaged Moyer & Osibodu to perform an unclaimed property risk assessment prior to receiving an audit notice from the States.

During the risk assessment, it was discovered that the client’s accounting procedure included adjusting millions of customer credit balances into income rather than devoting the resources to reconcile these credit balances due to their customers. Read More


Delaware Escheat Statute

Not only is Delaware a hot state this summer because of the weather, but it is a hot state because of their unclaimed property laws. On February 2, 2012, the Delaware Court of Chancery released its decision regarding an important lawsuit to the unclaimed property holder community, especially retailers and manufacturers incorporated in the state of Delaware. During 2010, Staples sued the State of Delaware in response to a demand for payment made by the State under the Delaware “Escheat Statute” (see Staples vs. Cook). Delaware countersued Staples. Staples reasoned that unclaimed rebates are not escheatable unclaimed property. Following many confusing briefs filed by Staples, the Escheat Statute clearly states that “property means personal property of every kind or description, tangible or intangible (including), but not by way of limitation, (i) money; (ii) bills of exchange, (iv) credits and (xiii) all other liquidated choses in action of whatsoever kind or character”.

Confused? It is evident how large or small companies may be unclear if what they possess on their books translate to unclaimed property, especially in a courtroom. Staples was under the impression that the "rebates" they offered were issued as “volume discount credits to business customers”, when in fact the rebates were defined as “property” according to Delaware’s Escheatment Statute. This therefore, makes the rebates subject to escheatment after a “five-year dormancy period”.

Just recently the Delaware House and Senate passed an “incentive” program for companies to report and remit their past due unclaimed property as part of a Voluntary Compliance Agreement. Read more below.

With so many changes in tax and unclaimed property laws, it is challenging for companies to keep-track of what constitutes “unclaimed property”. To have a better understanding of unclaimed property and decrease a potential audit risk, it is best to consult with an unclaimed property specialist.

After all, your best weapon against an audit is knowledge.

In The News

It's Conference Time

This month, Kathy Moyer and Josiah Osibodu,managing partners of Moyer & Osibodu, will share their 50 combined years of experience in unclaimed property compliance reporting, audits and industry issues with attendees at the 14th Annual Chesapeake Users Conference, August 12-15 at The Breakers hotel in Palm Beach, Florida.

Please visit for more information.

Deadline Reminder

Is your company complying with state unclaimed property laws? The deadline for compliance reporting in more than forty states, is coming up this fall on October 31, 2012. If you are unsure as to whether your company is ready for a state unclaimed property audit, please contact us for a 30 minute complimentary consultation.

Read more about Unclaimed Property

Compliance or Audit Risk?

From Cutting and Pasting to Electronic Filing

In the early 1980s, all reports were printed and submitted on “computer green bar” paper, and some states required a “special paper”’ with square holes for their reports. We’ve come a long way. Holders now have the option to upload data and reports directly onto secure state websites.

Read more about the Evolution of State Reporting Technology

Window of Opportunity?

July 1st marks the beginning of the new Delaware voluntary compliance program with their Secretary of State, which is scheduled to sunset on July 1, 2015. The big question now is whether this program is a "window of opportunity" and the answer will vary depending on the company. The Delaware House and Senate recently passed SB 258, establishing a new Voluntary Disclosure Agreement (VDA) program as an incentive for companies to report and submit their unclaimed property that is past due to Delaware. Read more.