Join now!   |   Subscribe   |   Pay an Invoice   |   Sign In
Unclaimed Property Focus
Blog Home All Blogs
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.

 

Search all posts for:   

 

Top tags: unclaimed property  Compliance  education  UPPO  audits  Delaware  due diligence  litigation  Advocacy  reform  Members  ULC  RUUPA  UP101  Gift Cards  legislation  reporting  UP Laws  UPPO annual conference  Uniform Law Commission  fall reporting  Holders Seminar  UPPO Asks  VDAs  Canada  service providers  securities  uniform unclaimed property act  Annual Conference  california 

Practical Insights and Deeper Dives Highlight Annual Conference Sessions

Posted By Administration, Wednesday, January 9, 2019

 

 

Unclaimed property continues to provide a maze of compliance challenges for the professionals charged with managing their companies’ escheatment responsibilities. This year’s UPPO Annual Conference agenda offers a wide variety of sessions designed to help navigate that maze and keep up with the latest trends.

 

Managing Relationships

If your company is using third-party agents for employee benefits, payroll, equity or other services, understanding the roles of each party and ensuring everyone is properly fulfilling their responsibilities is essential to the unclaimed property reporting process. The Managing Your Third-Party Administrator session will offer tips for managing this important relationship.

 

The Bridging the Gap session looks at another key relationship – the one between holders and the states. This session will help attendees gain insight into building positive relationships with state administrators and maintaining a compliance program that is mutually beneficial to the holder, the state and property owners.

 

Emerging Property and Account Types

Unclaimed property compliance involves much more than uncashed payroll checks and customer credits. Dive into the specific requirements and considerations for unique account types in the unclaimed property process during the Unique Accounts with Unique Requirements session. Attendees with explore developments related to traditional and nontraditional retirement/IRA accounts, beneficiary accounts, HSAs and FSAs, and the effects of linking activity between customer accounts. 

 

Another rapidly evolving area of unclaimed property compliance is the world of virtual currencies. The Virtual Reality, Real Unclaimed Property session will look at issues arising from virtual currencies, blockchain technologies and modern incentive programs. Attendees will get insight into regulatory changes and practical considerations related to cryptocurrencies, virtual wallets and customer loyalty programs. 

 

Audits and VDAs

Always hot topics, unclaimed property audits and voluntary disclosure agreements will take center stage in several sessions. 

 

Unclaimed property professionals who haven’t yet been fully exposed to the audit process can gain an understanding of the concepts, timelines and expectations at the Audit 101 session. This introduction to audits will explore the scope and methodologies used by states and their third-party auditors. 

 

Holders under examination or participating in a VDA may be subject to estimated liability. The Estimation Under Audits and VDAs session will explore estimation methodologies and considerations and examine how states differ in their estimation practices. 

 

With so many companies incorporated in Delaware, that state spends a lot of time in the unclaimed property spotlight, but other states can’t be neglected. The Non-Delaware Voluntary Compliance session will look at VDAs in other states and when an informal approach may be more beneficial than a formal VDA. 

 

Not all third-party auditors were created alike. In fact, their processes and procedures vary greatly. The Third-Party Auditor Differences session will walk through the many different document requests that holders can expect throughout the audit process and will examine conflicting auditor requests when under audit by multiple states using different firms. 

 

View complete details about educational sessions and other 2019 UPPO Annual Conference events. The early-bird registration deadline is Jan. 28, so register today for the best rate.

 

 

 

 

 

Tags:  audits  cryptocurrency  IRAs  state administrators  TPAs  UPPO Annual Conference  VDAs  virtual currency 

Share |
PermalinkComments (0)
 

Class Action Takes on Unclaimed Cryptocurrency

Posted By Administration, Thursday, March 22, 2018

Cryptocurrency has been plagued by negative headlines throughout its rise to prominence. Its volatility, ties to black market transactions on the “darknet,” and substantial thefts from cryptocurrency exchanges lead many to doubt proponents’ claims that cryptocurrency is the future of payment transactions.

 

Cryptocurrency’s latest foray into the news comes from its treatment – or lack thereof – as unclaimed property. On March 2, 2018, plaintiffs filed a class action lawsuit against Coinbase, a popular cryptocurrency exchange, for violating California’s Unclaimed Property Law.

 

At issue is Coinbase’s practice of allowing users to send cryptocurrency, including bitcoin, to email addresses rather than limiting transactions to exchanges between cryptocurrency wallets. Recipients of transactions sent to email addresses received instructions for creating Coinbase accounts and accessing their cryptocurrency. The complaint alleges that some recipients did not complete this process and, thus, never claimed their virtual funds.

 

Rather than advising senders that the funds were not claimed or escheating them to the state, Coinbase allegedly kept the cryptocurrency, violating California’s unclaimed property statute.

 

The lawsuit filing explains, “Imagine writing a cashier’s check to a friend. The bank withdraws funds from your account, but your friend never cashes the check. Does the bank get to keep the funds? The law clearly says no. But this is exactly what has happened with cryptocurrencies sent through Coinbase.com.”

 

The class action seeks to recover and return unclaimed cryptocurrency to the intended recipients. In the case of email addresses that are no longer active, the property would be escheated to California.

 

Recognizing the potential for such conflicts as nontraditional currencies become more popular, the Uniform Law Commission included virtual currency within the definition of “property” in the Revised Uniform Unclaimed Property Act of 2016. As states have introduced and adopted new unclaimed property statutes based on RUUPA, virtual currency holders face the same requirements as holders of other property types.

 

Although California’s Unclaimed Property Law does not specifically mention virtual currency, a 2017 analysis, “Treatment of Bitcoin Under U.S. Property Law” by Perkins Coie LLP, suggests cryptocurrency meets the state’s definition of “intangible property” covered by the law.

 

As more people and companies recognize bitcoin and other cryptocurrencies as legitimate forms of payment, more unclaimed property issues will likely arise. UPPO will continue to monitor and report on the Coinbase class action and other noteworthy cases. 

Tags:  bitcoin  cryptocurrency  unclaimed property  virtual currency 

Share |
PermalinkComments (0)
 

Illinois Passes New Unclaimed Property Act, Repeal Effort Underway

Posted By Administration, Thursday, July 20, 2017

On July 6, 2017, Illinois budget bill S.B. 9 became law after the House voted to override the governor’s veto. Among the provisions added to the bill shortly before passage was the Illinois Revised Uniform Unclaimed Property Act, which repeals the state’s current unclaimed property statute and replaces it with new language. 

 

S.B. 9’s unclaimed property provisions become effective on Jan. 1, 2018. However, a movement to repeal the Illinois RUUPA is already underway. 

 

Illinois RUUPA

Among the Illinois RUUPA provisions that are most noteworthy for holders are:

  • The new statute’s definition of escheatable “property” specifically excludes game-related digital content, loyalty cards and gift cards. The definition of “stored-value card” specifically excludes loyalty cards and game-related digital content but includes gift cards. Because stored-value cards are escheatable property, these opposing definitions present an obvious conflict for holders that deal with gift cards. 
  • The new statute defines “virtual currency,” and includes it within the list of escheatable property.
  • Tax-deferred accounts are considered abandoned under the new statute three years after either the required distribution date for avoiding tax penalties, or the 30th anniversary of the account’s opening date—whichever is earlier. Earlier abandonment dates are specified for deceased owners of such accounts. The statute specifically includes health savings accounts in the tax-deferred account provision. 
  • Similarly, the statute includes detailed provisions regarding custodial accounts for minors.
  • Holders are required to maintain records for 10 years. Retained records must include unclaimed property report information; the date, location and circumstances that led to the property rights; property value; last-known owner address; details for items that were not reported as unclaimed; and details related to money orders, traveler’s checks and similar instruments. 
  • The statute incudes a “transitional provision” that requires holders to file an initial report for property that was not previously reportable, but is reportable under the new statute for a period of five years from the effective date (Jan. 1, 2018). 
  • The state’s current business-to-business unclaimed property exemption is excluded from the new law. 

 

Repeal Effort

Before S.B. 9 passed, efforts to repeal the Illinois RUUPA provisions were already underway. On July 3, 2017, Rep. David McSweeney introduced H.B. 4078, which specifies that if S.B. 9 becomes law, the Illinois RUUPA provisions contained in S.B. 9 will be repealed, effective immediately. If passed, the state’s current unclaimed property law, the Uniform Disposition of Unclaimed Property Act, would remain in effect. Before the Illinois legislature’s recess, 19 representatives signed on as co-sponsors of the bill. 

 

For the latest information about this and other noteworthy unclaimed property bills, visit UPPO’s govWATCH website

 

 

Tags:  B2B exemption  gift cards  Illinois  RUUPA  unclaimed property  virtual currency 

Share |
PermalinkComments (1)
 

The Next Frontier: Virtual Currencies

Posted By Administration, Thursday, January 8, 2015

LivingSocial was founded in 2007, Groupon followed shortly behind and launched in 2008, Bitcoin went open source in 2009. Not only have these companies changed how consumers pay for goods and interact with businesses, but they have also created a state of unanswered questions for unclaimed property holders. As these payment types mature, fundamental questions like the questions below need to be answered.


During the 2015 UPPO Annual Conference session The Next Frontier: Virtual Currencies, Sara Lima, counsel at Reed Smith, and, Robert Previti, associate at Sutherland, Asbill & Brennan, will explore the nuances and commonly asked questions of virtual currency. They won’t guarantee they’ll answer all your questions but they can guarantee an interesting discussion of what’s going on currently with these payment options, how virtual currency is fundamentally questioning holder responsibilities, and how holders are dealing with the lack of guidance. Here are some questions they’ll wrestle with during the intermediate session:

Value of virtual currency

When holders need to report and remit Bitcoin questions surround how to identify the value of the property. Will holders be required to liquidate it prior to escheatment, and if so, when do you identify value -- when the currency was initially purchased or at time of abandonment?


Another question is if holders will be required to remit Bitcoin in form of Bitcoin, or convert it into U.S. dollars. New York Department of Taxation and Finance released guidance on virtual currency on Dec. 5, and based its memo off a notice released by the Internal Revenue Service (IRS) in March 2014. The IRS notice provides that for federal tax purposes virtual currency is to be treated as property and that the virtual currency must be converted into U.S. dollars to determine the value of the payment. Though this guidance is specific to tax purposes, it’s an indication that the profession of unclaimed property isn’t the only struggling with virtual currencies. It is recommended holders check with specific state laws and regulations for compliance guidance on virtual currency.


Classifying virtual currency
Since these payment types arrived after the most recent revision of the Uniform Unclaimed Property Act (UUPA), specific property type codes and guidance for virtual currency does not exist in many states. With limited guidance, holders are questioning if it should it be classified as a credit, the miscellaneous property (catch-all), customer refund, or something else?


Who is considered the holder?
In the context of promotional offer marketers, like Groupon and Living Social, that offer deals on behalf of companies, should the retailer or the promotional marketer be considered the holder of unredeemed vouchers?


To own Bitcoins you are given a private key which gives you the right to access the certain amount of Bitcoins associated with the key. To lose the key means losing the Bitcoins associated with the key. It can be argued that there are no owners of Bitcoins rather transactions or record entries into the block chain (Bitcoin’s public ledger).


The Uniform Law Commission (ULC) is leading the charge to reform the present Uniform Unclaimed Property Act, and is also grappling with the classification of virtual currency. Stakeholders who submitted comment to the ULC regarding virtual currencies were the National Association of Unclaimed Property Administrators (NAUPA) and UPPO:


NAUPA recommends
that the definition of the property be expanded to include virtual currency.


UPPO submitted comment
regarding the exclusion of promotional programs (promotional points/miles, reward cards, and loyalty programs) recommending that promotional programs not redeemable in cash or for which no consideration was provided, be exempt from unclaimed property law.


To learn more about the issues surrounding virtual currency and how holders are currently working without clear guidance to minimize their liability attend the 2015 UPPO Annual Conference, March 8 – 11.


More Resources
Internet Daily Deals – Don’t Overlook the Unclaimed Property Compliance Risks!
Stakeholder comments submitted to the ULC

Tags:  Compliance  Unclaimed Property  Virtual Currency 

Share |
PermalinkComments (0)
 
Membership Software Powered by YourMembership  ::  Legal