SASA Annual Meeting 2014 January 9 2014 Presented by Donald R Kimber CPA New York State Unclaimed Property Report Agenda Overview The Reporting Process Important Considerations Voluntary Compliance ID: 429896
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New York State Unclaimed Property Reporting
SASA Annual Meeting 2014
January 9, 2014
Presented by:
Donald R. Kimber, CPASlide2
New York State Unclaimed Property Report
Agenda
Overview
The Reporting ProcessImportant ConsiderationsVoluntary ComplianceMailing RequirementsComplete ReportVerification and ChecklistCalendar of Events and Property Type TablesProperty Table TypesFrequently Asked Questions
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Overview
The 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.
2Slide4
Overview
Sources of Information
The Handbook for Reporters of Unclaimed Funds
Important 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 Industries3Slide5
Overview
New York State Office of the Comptroller –
Office
of Unclaimed Funds (OUF) Contact InformationClaims Processing Unit: nysouf@osc.state.ny.usReports Processing Unit: nysrpu@osc.state.ny.us
Director of Audits: nysaudit@osc.state.ny.us
Holder Education and Research Unit:
HolderEd@osc.state.ny.us
OUF
Telephone Numbers: (800
) 221-9311
or (518) 270-2200
4Slide6
The Reporting Process
Determine 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 periods5Slide7
The Reporting Process
Calculate the number of items to be reported
Select a format based on the number of items
Enter 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
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Important Considerations
Reporting Liability
May 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 law7Slide9
Important Considerations
Extensions
May request an extension of time to complete the required activity
Should 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 nysrpu@osc.state.ny.us , the Communication Center at (800) 221-9311 or (518) 270-22008Slide10
Important Considerations
Exemptions
Not able to comply with any statutory or regulatory reporting requirement
May make application to the Reports Processing Unity seeking exemption from the mandated processingAn equally efficient and effective method of reporting is available9Slide11
Important Considerations
Penalties
Subject 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 State Action shall be maintained against an organization for the recovery of abandoned property paid to the State Comptroller10Slide12
Important Considerations
Retention of Records
Retain records relating to abandoned property for five years
Due 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 offset11Slide13
Important Considerations
Scenarios that Do Not Eliminate the Need to Report
Telephone or verbal contact
Internal 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, 199212Slide14
Voluntary Compliance
Duration of Program
In effect since 1985
Encourage 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 property13Slide15
Voluntary Compliance
Self-Audits and CPA Audits
Self-audits and certified public accountant (CPA) examinations are considered to be valid
Reserve 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.14Slide16
Mailing RequirementsFirst 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 $1,000.00.
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Mailing Requirements
Multiple Items
If you are reporting more than one item for the same customer, one letter should address all of the items
CostsYou may deduct the mailing costs for certified mailYou may not make a bulk deduction against the final remittance16Slide18
Complete Report
A final report is a complete updated detailed listing of all accounts deemed abandoned
Complete the Initial and Escheated Amount fields
File 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 remittance17Slide19
Verification and Checklist(Form AC2709 – See Appendix A)
Each report you submit must have its own Verification and Checklist including:
Organization Name
Federal Employer ID NumberContact NameSignatureSummary TotalsProperty Types18Slide20
Report Detail Considerations
Aggregating
Reporters of abandoned property need not provide owner or property information for abandoned accounts valued at $20.00 or less
These items may be aggregated and described on your abandoned property report19Slide21
Reporting Methods and Formats
Methods
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
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Calendar of Events and Property Type Tables
Calendar of Events – indicates by article/section (See Appendix C)
Type of business
Report period ending/report cut-off dateDue date of final reports and remittancesApplicability and associated due dates of publication and mailing requirements21Slide23
Calendar of Events and Property Type Tables
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Article
BusinessTypeCut-OffDateFinal Report & Pay Due
Pub Notice DuePub Proof Due
1
st
Class Mail Due
Cert/
Reg
Mail Due
V & 1315
All business entities
12/31
3/10
12/10
1/10
1308
Unclaimed Wages-Dept
of Labor
3/31
2/1
2/1
1314
Consumer Credit Balances
12/31
2/15
11/15
12/15
Calendar of EventsSlide24
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 Balances
RefundsOther Amounts and SecuritiesThe Tables indicate by property type:Property type codeRelevant article/section of the Abandoned Property LawDescription of the propertyAssociated dormancy period23Slide25
Calendar of Events and Property Type Tables
When determining dates and requirements, you should:
Review the calendar to determine the reporting schedule for your organization
Review 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.24Slide26
Calendar of Events andProperty Type Tables
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Property Type
Valid Under Article/SectionProperty Type DescriptionDormancy PeriodAccount Balances
1H
§1314
Credit
Balances; Consumer Credit Accounts
3 years
1J
III
Credit Balances or Cash Due Renters
of Safe Deposit Boxes
3 years
Negotiable
Instruments
2G
§1315
Outstanding Checks Issued to Vendors (accounts payable)
3 years
Other Amounts
8A
V, VA & 1308
Wages,
Payroll, Salaries, Commissions, Pension Payments
3 years
8B
§1315
Unredeemed Gift Cards (5
yrs
), Merchandise Credits, Lay Away Deposits, Accounts Receivable and Accounts Payable issued as electronic cards (3
yrs
)
3/5 years
Property TypesSlide27
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.26Slide28
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.27Slide29
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.28Slide30
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.29Slide31
Contact Information
Bowers & Company CPAs PLLC
Donald R. Kimber, CPA
1200 AXA Tower I – 100 Madison St. Syracuse, New York 13202
Phone: 315-234-1176
drk@bcpllc.com
www.bcpllc.com
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