Presentation on theme: "New York State Unclaimed Property Report"— Presentation transcript:
0 New York State Unclaimed Property Reporting SASA Annual Meeting 2014January 9, 2014Presented by:Donald R. Kimber, CPA
1 New York State Unclaimed Property Report AgendaOverviewThe Reporting ProcessImportant ConsiderationsVoluntary ComplianceMailing RequirementsComplete ReportVerification and ChecklistCalendar of Events and Property Type TablesProperty Table TypesFrequently Asked Questions
2 OverviewThe law requires organizations to review their records annually and transfer accounts that have reached specified dormancy thresholds to the Comptroller, who serves as custodian of the funds until the rightful owners claim them.To ensure compliance, organizations should review the law.
3 Overview Sources of Information The Handbook for Reporters of Unclaimed FundsImportant General InformationA review of the Reporting ProcessAn Explanation of the Various Types of Reports and Format Options with SamplesIndustry-Specific DocumentsProvides Level of Detail Necessary to Meet Reporting Requirements Unique to Individual Industries
4 New York State Office of the Comptroller – OverviewNew York State Office of the Comptroller –Office of Unclaimed Funds (OUF) Contact InformationClaims Processing Unit:Reports Processing Unit:Director of Audits:Holder Education and Research Unit:OUF Telephone Numbers: (800) or (518)
5 The Reporting ProcessDetermine which part(s) of the Abandoned Property Law applies to your organization.It is essential to identify the section of the statute that applies to your business, because the rules for reporting vary within industries.Review your books and records to determine which items are dormant.Based on the statute’s provisions, determine:The types of properties to be examinedTheir associated dormancy periods
6 The Reporting Process Calculate the number of items to be reported Select a format based on the number of itemsEnter data into the chosen formatPerform due diligencePerform due diligence prior to remitting any funds to New York.Review the mandated statutory requirements of the Article/section of the Law relative to your report.Update the report as requiredFinalize the report
7 Important Considerations Reporting LiabilityMay be obligated to report under various and multiple sections of the statute.When the year-end cut off and reporting deadlines are different you must file separate reports.WaiversSubject to penalties of one hundred dollars for each day the report or affidavit shall be willfully delayed or withheldSection 1412 of the statuteWillfully filing false reports is punishable under the provisions of the penal law
8 Important Considerations ExtensionsMay request an extension of time to complete the required activityShould describe the circumstances that prevent the activity from being completed timelyShould indicate the amount of additional time needed to properly complySubmit at least 30 days prior to the activity due dateContact Reports Processing Unit at , the Communication Center at (800) or (518)
9 Important Considerations ExemptionsNot able to comply with any statutory or regulatory reporting requirementMay make application to the Reports Processing Unity seeking exemption from the mandated processingAn equally efficient and effective method of reporting is available
10 Important Considerations PenaltiesSubject to penalties of one hundred dollars for each day the report or affidavit shall be willfully delayed or withheld.Section 1412 of the statuteWillfully filing false reports is punishable under the provisions of the penal lawInterest Charges for Late Payment or Delivery of Abandoned Property10% per year from the date payment or delivery was due to the date you make paymentReporting Organizations Not Liable After Payment to the StateAction shall be maintained against an organization for the recovery of abandoned property paid to the State Comptroller
11 Important Considerations Retention of RecordsRetain records relating to abandoned property for five yearsDue DiligenceVia the enactment of Section 1422, the statute now requires:All holders of abandoned property perform due diligence mailings at scheduled intervalsThe cost for completing the certified mailing can be offset from the individual accountsCosts associated with the first class mailing requirement cannot be offset
12 Important Considerations Scenarios that Do Not Eliminate the Need to ReportTelephone or verbal contactInternal activity such as service chargesThe fact that correspondence – including statements, proxies, annual reports, and confirmations – mailed to the entitled owner is NOT returned as undeliverable.A willful attempt to conceal the abandoned propertyReach back to January 1, 1992
13 Voluntary Compliance Duration of Program Eligibility In effect since 1985Encourage holders to come forward and report abandoned property free of interest and penaltiesEligibilityVoluntary compliance applies to first-time reporting organizationsThose who have filed in the past, but recognize that they have failed to report a particular type of property
14 Voluntary Compliance Self-Audits and CPA Audits Self-audits and certified public accountant (CPA) examinations are considered to be validReserve the right of reviewDoes not apply once they contact you to schedule an opening conference.Purpose is to give the holder an opportunity to review records and correct any issues or omissions.
15 Mailing Requirements First Class and Certified Mailings At least 90 days prior to their final report/remittance date, send a first class mailing to each owner whose name is expected to appear on that report.At least 60 days prior to their final report/remittance date, send a certified mailing, return receipt requested, to each owner whose name is expected to appear on that report with abandoned property valued in excess of $1,
16 Mailing Requirements Multiple Items Costs If you are reporting more than one item for the same customer, one letter should address all of the itemsCostsYou may deduct the mailing costs for certified mailYou may not make a bulk deduction against the final remittance
17 Complete ReportA final report is a complete updated detailed listing of all accounts deemed abandonedComplete the Initial and Escheated Amount fieldsFile the report with remittanceThe final report consists of:A completed Verification and Checklist (form AC2709) – See Appendix AReport detail on CD, File Transfer Protocol (FTP), or paper(form AC2686) – See Appendix BA remittance
18 Verification and Checklist (Form AC2709 – See Appendix A) Each report you submit must have its own Verification and Checklist including:Organization NameFederal Employer ID NumberContact NameSignatureSummary TotalsProperty Types
19 Report Detail Considerations AggregatingReporters of abandoned property need not provide owner or property information for abandoned accounts valued at $20.00 or lessThese items may be aggregated and described on your abandoned property report
20 Reporting Methods and Formats FTP Process (Secure Electronic Data Transmission)Paper Reporting (See Appendix B - Form AC2686)FormatsNAUPA (National Association of Unclaimed Property Administrators)NYS Electronic Reporting Program (NYCD)HDT Layout
21 Calendar of Events and Property Type Tables Calendar of Events – indicates by article/section (See Appendix C)Type of businessReport period ending/report cut-off dateDue date of final reports and remittancesApplicability and associated due dates of publication and mailing requirements
22 Calendar of Events and Property Type Tables ArticleBusinessTypeCut-OffDateFinal Report & Pay DuePub Notice DuePub Proof Due1st Class Mail DueCert/Reg Mail DueV & 1315All business entities12/313/1012/101/101308Unclaimed Wages-Dept of Labor3/312/11314Consumer Credit Balances2/1511/1512/15
23 Calendar of Events and Property Type Tables Property Type Tables – the property type tables are divided into the following property categories (See Appendix D):Account BalancesRefundsOther Amounts and SecuritiesThe Tables indicate by property type:Property type codeRelevant article/section of the Abandoned Property LawDescription of the propertyAssociated dormancy period
24 Calendar of Events and Property Type Tables When determining dates and requirements, you should:Review the calendar to determine the reporting schedule for your organizationReview the appropriate property type(s) on the property type tables to confirm the validity of the property type(s), as well as to determine the dormancy period for the property type(s) you are holding.
25 Calendar of Events and Property Type Tables Property TypesProperty TypeValid Under Article/SectionProperty Type DescriptionDormancy PeriodAccount Balances1H§1314Credit Balances; Consumer Credit Accounts3 years1JIIICredit Balances or Cash Due Renters of Safe Deposit BoxesNegotiable Instruments2G§1315Outstanding Checks Issued to Vendors (accounts payable)Other Amounts8AV, VA & 1308Wages, Payroll, Salaries, Commissions, Pension Payments8BUnredeemed Gift Cards (5 yrs), Merchandise Credits, Lay Away Deposits, Accounts Receivable and Accounts Payable issued as electronic cards (3 yrs)3/5 years
26 Frequently Asked Questions What is due diligence, and when should it be done?Due diligence is a term that describes an organization’s efforts to re-establish contact with customers whose accounts have been deemed abandoned.How long should I keep my records?All organizations other than a broker or dealer need to retain records relating to abandoned property they are remitting to New York State for five years following December 31 of the year for which an Abandoned Property Report was filed.
27 Frequently Asked Questions Are all amounts reportable?Yes, all amounts are reportable. However, holders may report certain property valued at $20 or less per owner in aggregate.Do I need to report amounts when/if the owner’s address is unknown?Yes, if the owner’s address is unknown. Unknown owners, unknown addresses, and foreign address properties are reported to the holder’s state of incorporation.
28 Frequently Asked Questions What happens to property once it’s turned over to the State?Once money or property is reported to the state as unclaimed, New York State makes a diligent effort to locate the missing owners and reunite them with their lost assets.Where is the money held?The funds are held in the New York State General Fund forever until the rightful owners or their heirs come forward or are found.
29 Frequently Asked Questions Are holders required to file a “negative report”?The NYS Abandoned Property Law does not require organizations to file negative reports.Is there are minimum amount to report?No, all property must be reported to the office.
30 Bowers & Company CPAs PLLC Contact InformationBowers & Company CPAs PLLCDonald R. Kimber, CPA1200 AXA Tower I – 100 Madison St.Syracuse, New York 13202Phone: