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Unclaimed Property Focus
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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Attending the UPPO Annual Conference? Explore New Orleans

Posted By Administration, Thursday, March 14, 2019

This year’s UPPO Annual Conference will take place in one of America’s most interesting cities, New Orleans. With its rich mix of history, culture and entertainment, New Orleans is sure to provide attendees who take some time to see the sights with an unforgettable experience.   

 

Restaurants

New Orleans has earned its reputation as one of the nation’s greatest dining destinations. Commander’s Palace, the legendary restaurant where celebrity chefs Paul Prudhomme and Emeril Lagasse began their careers, offers legendary Creole fare. Parkway Bakery and Tavern has been serving classic po’ boy sandwiches for more than 100 years, winning awards and making countless best restaurant lists. One of the city’s most popular Latin restaurants, Maïs Arepas serves some of the best Colombian food in the Southeast. Willie Mae’s Scotch House takes southern soul food to another level with its fried chicken, macaroni and cheese, fried okra and cornbread. If you crave a classic Cajun seafood boil, check out Boil Seafood House for heaping servings of crab, shrimp, clams and more. 

 

French Quarter

No visit to New Orleans would be complete without visiting the French Quarter. Packed with history, culture and nightlife, this neighborhood is where the party begins but never seems to end. Lined with 13 blocks of bars, restaurants and clubs, Bourbon Street is the heart of the neighborhood. However, there’s plenty to see beyond Bourbon Street. Overlooking Jackson Square, St. Louis Cathedral is one of the oldest churches in America and one of the city’s most architecturally stunning landmarks. The 1850 House museum takes visitors back in time to a middle-class home during the city’s most prosperous era. For a different, darker side of the city, the Voodoo Museum explains why voodoo plays such an integral role in the history of New Orleans.    

 

Beyond the French Quarter

If you have time to venture beyond the tourist-centric French Quarter, New Orleans has plenty to see. Magazine Street is a six-mile stretch of independent shops, galleries and restaurants that offers a less chaotic, more charming side of New Orleans. The Garden District is home to historical homes, beautiful architecture and one of the city’s oldest cemeteries. American history buffs can delve into one of the nation’s most interesting eras at The National WWII Museum in the Warehouse District. Visitors can take in the natural wonder of Louisiana’s bayou at Jean Lafitte National Historical Park and Preserve, the sight of the Battle of New Orleans in 1815 and home to more than a few alligators. 

 

Enjoy your time in New Orleans!

Tags:  UPPO annual conference 

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New Tennessee Administrative Rules go into Effect

Posted By Administration, Thursday, March 7, 2019

On March 4, 2019, new administrative rules regarding unclaimed property went into effect. The rules are the latest in a series of updates to the state’s unclaimed property laws and practices, which also include the passage of H.B. 420, the state’s version of the Revised Uniform Unclaimed Property Act, and H.B. 2278, which changed the state’s unclaimed property reporting date from Dec. 31 to May 1. 

 

Noteworthy sections of the rules for holders include:

 

Reporting

  • Electronic reporting is required.
  • Negative reports may be filed. 
  • Reported cashier’s checks must include the name and address of the payee and purchaser, if known.
  • When filing initial safe deposit box reports, property should continue to be held for an additional year before filing a final report and turning over the property to the state.

 

Property Delivery

  • Most property should be remitted electronically via ACH or other method approved by the treasurer. 

 

Securities

  • Remitted securities shall include all dividends, interest, warrants or other rights, or associated cash payable by check or electronically.
  • Holders shall remit securities in such a form that future earnings will be delivered in cash rather than an increase in the number of shares. 
  • Holders shall remit securities in a form that allows the treasurer to sell them. 

 

Examinations

  • Holders will receive a notice of examination at least 30 days before an examination begins.
  • An examination will begin with an entrance conference at which time the examiner will identify other states participating; a tentative timeline and duration; a description of responsibilities; the potential types of records subject to examination; the lookback period; and an explanation of methods and estimation techniques that may be used.
  • An examination may include records of current accounts, dormant accounts and accounts that may have been closed and archived; agreements regarding the deduction of service charges; increases or decreases in account value; and interest payments; and policies and procedures.
  • If records are unavailable, estimation of liability may be used. The examiner will provide written notice of the estimation methodology and for which years. The examination subject may object to the estimation methodology by following the process defined by state law. 

 

Due Diligence

  • Holders are expected to conduct due diligence.
  • The return of first-class or superior mailing sent to the owner’s last-known address is considered evidence that the owner’s location cannot be ascertained. 
  • First-class or superior mailings that are not returned as “undeliverable” are considered owner contact and an indication of interest in the property. Examples include computerized account  or interest earning statements. 

 

Holders with unclaimed property reportable to Tennessee can access the new rules, related Tennessee laws and regulations, and additional compliance information on the state’s Treasury Department website.  

Tags:  audits  due diligence  examinations  reporting  securities  spring reporting  Tennessee 

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GAO Report Spotlights Unclaimed 401(k) Plan Tax Treatment Uncertainty

Posted By Administration, Wednesday, February 27, 2019

In May 2018, the Internal Revenue Service issued Revenue Ruling 2018-17, stating that IRA holders must withhold 10 percent federal income tax and issue form 1099Rs when reporting unclaimed IRAs to the states. The deadline for doing so was originally set at Jan. 1, 2019, but was later extended to Jan. 1, 2020. 

 

In February 2019, the tax treatment of unclaimed retirement accounts was in the spotlight again, but this time the accounts at issue were 401(k) accounts. The U.S. Government Accountability Office issued a 59-page report, Federal Action Needed to Clarify Tax Treatment of Unclaimed 401(k) Plan Savings Transferred to States. 

 

Based on information learned, in part, by surveying the states, IRA transfer agents and 401(k) plan service providers, the GAO reached several conclusions:

  • Although the IRS and Department of Labor have issued guidance on transferring retirement savings to states, the IRS has not clarified certain responsibilities or ensured that the retirement savings that owners claim from states can be rolled over into other tax-deferred retirement accounts. 
  • The IRS has not specified whether 401(k) plan providers should report state transfers as distributions and withhold federal income taxes. 
  • 401(k) plan provider practices vary. Some providers withhold taxes when transferring savings to states while others do not. This makes the IRS less likely to collect federal income taxes that may be due if transfers are taxable events. 
  • The IRS has not taken action to ensure that individuals who claim 401(k) savings from a state can roll over these savings to other tax-deferred retirement accounts. The IRS allows individuals to roll over savings after 60 days for several reasons, none of which include claiming 401(k) savings from a state. Account owners who are unable to roll over their reclaimed savings forgo the opportunity to continue investing the funds on a tax-deferred basis. 

 

The report includes three recommendations:

  1. The IRS Commissioner should work with the Department of the Treasury to consider clarifying whether transfers of unclaimed savings from employer-based plans (such as 401(k) plans) to states are distributions; what, if any, tax reporting and withholding requirements apply; and when they apply. 
  2. The IRS Commissioner should work with the Department of the Treasury to consider adding retirement savings transferred to states from terminating defined contribution plans to the list of permitted reasons for rolling over savings after the 60-day rollover period, in a form consistent with the rules adopted on the taxation of transfers of unclaimed retirement savings. 
  3. The Secretary of Labor should specify the circumstances, if any, under which uncashed distribution checks from active plans can be transferred to the states. 

 

The IRS and DOL are not obligated to respond to the GAO’s recommendations, so specific action resulting from the report remains uncertain.

 

Read the full GAO report

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2019 Spring Reporting Guide

Posted By Administration, Wednesday, February 20, 2019

Spring reporting season is again upon us. Several states require holders to file reports between March 1 and July 1. Following are reporting deadlines for these states, along with helpful links. This list is not exclusive to a specific holder industry, so please check the states’ websites for information on industry-specific reporting information and deadlines. 

 

Note: Tennessee was previously a spring reporting state but has since moved its filing date to fall. Details

 

Connecticut 
Report due: March 29, 2019
Extensions: Extensions may be requested.


Contact: Maria Greenslade: maria.greenslade@ct.gov or (860) 702-3125
Connecticut holder resources 

 

Notes from UPPO’s state administrator survey:

  • Holder instruction manual has been updated in the past three months.


Delaware
Report due: March 1, 2019
Extensions: Extensions may be requested.


Contact: escheat.holderquestions@delaware.gov or (302) 577-8782
Delaware holder resources.

 

Notes from UPPO’s state administrator survey:


Florida 
Report due: April 30, 2019
Extensions: Extensions may be 
requested.


Contact: EReporting@MyFloridaCFO.com, (850) 413-5522
Florida holder resources.


Illinois 
Report due: May 1, 2019
Extensions: Extensions may be requested.


Contact: Email form, (800) 961-8303
Illinois holder resources.

 

Michigan

Report due: July 1, 2019

Extensions: No details provide.

 

Contact: TreasUPDReporting@michigan.gov or (517) 636-6940

Michigan holder resources.

 

Notes from UPPO’s state administrator survey:

  • New website URL: https://unclaimedproperty.michigan.gov
  • Updated holder instruction manual/handbook expected soon.
  • Holders can now report properties and remit payments electronically.
  • HDE files no longer accepted.
  • Holders are expected to provide as much identifying, verifying information as possible. Without all information, claimants sometimes are referred back to holders for verification purposes.
  • Holders with nothing to report are able to submit a zero/negative report online. 
  • Because CEPAS has changed its company ID, holders will need to update their information with a new number provided on the payment website. 
  • EFT is required at the time of filing.

 

New York 
Report due: March 10, 2019
Extensions: Extensions may be requested. 

Contact: NYSRPU@osc.state.ny.us or (800) 221-9311
New York holder resources.

 

Notes from UPPO’s state administrator survey:

 

Pennsylvania 
Report due: April 15, 2019
Extensions: Extensions may be requested.  

Contact: report@patreasury.gov or (800) 379-3999
Pennsylvania holder resources. 

Texas

Report due: July 1, 2019

Extensions: Does not accept extension requests.

 

Contact: up.holder@cpa.texas.gov or (800) 321-2274

Texas holder resources.

 

Notes from UPPO’s state administrator survey:

  • Holder instruction manual has been updated in the past three months.

 

Vermont 
Report due: May 1, 2019
Extensions: Extension requests may be submitted to the Unclaimed Property Division of the State of Vermont Office of the Treasurer. Describe the circumstance(s) for the delay and indicate the anticipated report delivery date.


Contact: tre.upcompliance@vermont.gov or (802) 828-2407
Vermont holder resources.


For detailed information about reporting deadlines, dormancy periods, due diligence requirements, exemptions and deductions, electronic filing and much more, UPPO members can refer to the Jurisdiction Resource Guide

Tags:  spring reporting  unclaimed property 

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UPPO Asks: Unclaimed Property Misperceptions​

Posted By Administration, Thursday, February 14, 2019

Periodically, UPPO asks members to respond to a question, sharing their ideas, insights, and experience. The recurring UPPO Asks feature is a compilation of their responses. 

 

We recently asked several members: What is the most noteworthy or most frequent misperception you’ve heard about unclaimed property? 

 

“The most noteworthy misperception I hear is that MissingMoney.com and states’ websites are the only places to check for claimable unclaimed property.”—Paul Janisko, CEO, CoreUCP

 

 

“Most people think of unclaimed property as lost stuff, like umbrellas. They do not understand how that could pertain to my company.”—Amy Soler, administrative assistant, tax department, Solvay Business Services

 

 

“Sometimes it is challenging to convince management that the due diligence and other unclaimed property reporting requirements must be followed. Once I took a boss to an unclaimed property presentation provided by the state in order to show that the company needed to follow the unclaimed property rules. Many people that I speak with are still unaware that unclaimed property reporting rules exist. I have stated many times to colleagues who work at other companies, ‘No, you can’t write off old, uncashed checks.’”—Ruby Spiller, senior GL accountant, Infineon Technologies Americas Corp.

 

 

“A misperception on the work end of it would be that it’s easy. People within my company that I have talked to don’t realize how much work actually has to go into it. They just assume I throw a report together and send it off, when there is much more to it.”—Amy Lagunero, accounts payable specialist, Mortgage Guaranty Insurance Corporation

 

 

“The two most common misperceptions I’ve heard are: 1. As a holder, you only have to file in the states in which you operate; and 2. There is a uniform law that most states adopt. The reality is quite the opposite.”—Missy Key, vp – accounting, America First Credit Union

 

 

“1. Owners don’t realize how complicated the process is for getting escheated funds back from the state. Even when all of the required documentation is provided to the state by the owner, it can take years for the owners to get their funds back, if they are able to get them back at all.

 

"2. You don’t have to claim unclaimed property on taxes or as income.

 

"3. Owners don’t realize that their funds are sent to the state after the dormancy period. They often think that we just hold the money forever until they ask for it.”—Courtney Papinchak, accounting manager, Anadarko Petroleum Corporation

 

 

“The most frequent misperception I find for holders is the discounting of the gravity of their compliance responsibilities, recognition of its application and the degree of their potential exposure.

 

“The most frequent misperception I find for owners is that when searching for their properties they need to utilize searches for all name combinations, including aliases, in as many jurisdictions as possible, especially those individuals whose surname may also be a first name.”—Mark Watters, owner, Watters Unclaimed Property Consulting LLC

 

 

“They don’t think it affects them so they don’t care about unclaimed property.”—Susan Maul, senior manager, indirect tax, Arris International PLC

 

 

“The misperception I have often heard is that if someone is owed money from a company they would somehow be found. At this point, I gently explain that most often if the payee has changed address several times, or their last name has changed or whatever other circumstance applies, it becomes very difficult to track an individual – especially if no unique identifier is available, like a SSN or date of birth. I have personally experienced this many times as an escheat administrator since we do not collect SSNs or DOBs from our clients. 

 

“Another misperception I have heard of is if a due diligence letter is not returned by the U.S. Postal Service that means that the owner has received it and funds should not be escheated. Again, I gently explain that just because a due diligence letter was not returned undeliverable, we cannot assume that the owner received it. Since no response has been forthcoming from the owner, it is safe to assume that funds should be escheated.”—Antoinette Di Dato, accounting – compliance, GreenbergTraurig, P.A.

 

 

“One of the biggest noteworthy things in working for a TPA is that I rely heavily on our adjusters to contact claimants and providers when a check becomes stale dated. I am frequently asked to void checks because a claimant/provider is not able to be contacted or due to not having a current address. This is frustrating from my end because I know I am sending out due diligence letters to the wrong address, which means I’m not giving the state ‘good’ information when filing.”—Eric Nesbitt, accounting supervisor, Cannon Cochran Management Services, Inc.

 

 

“I guess the most frequent misconception is that once funds are moved to an unclaimed liability account, the business’s normal policy and procedures are eliminated. For instance, if the funds are related to a death claim, the misconception both internally and externally is that the death claim paperwork is no longer required in order to pay the funds out to the owner.”—Tony McDowell, senior accountant, American Equity Investment Life Insurance Company

 

 

“Common misperceptions in the oil and gas industry are that the states do not want every penny – for instance, only $50 and above; and that the states keep the money after a certain number of years of being unclaimed.”—Joni Byrd, senior advisor – land administration, EnerVest Ltd.

 

 

“The most frequent misperception I’ve heard about unclaimed property is individuals accept full responsibility for the recovery of unclaimed funds. If the statement were true, there wouldn’t be billions of dollars sitting on general ledgers of many companies. I believe some people don’t know the funds are there. Some think the funds are so small they aren’t worth the time and effort. Some don’t believe unclaimed property has anything of value. They believe it is a scam. But, I believe each fund-matters – each one has worth – each has a right to be claimed, and when added together the sum is astonishing.”—Monica Johnson, escheatment/unclaimed property manager, United Parcel Service

 

 

Now it’s your turn. What do you think are the most important personality traits for an unclaimed property professional? Add a comment to this post to share your response.

 

Tags:  unclaimed property  UPPO Asks 

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