Like traditional voluntary taxation programs, the program offers some incentives for participation, such as the ability to control the process, the abandonment of interest and penalties, and finality. However, the program`s reference period is generally the same as the review period: ten years from the date the property became commendable. Delaware is the most aggressive state in unsolicited real estate, with some estimates that unused real estate is the state`s third-highest source of income. Delaware`s appetite in this room is partly a product of its vast unclaimed property rights, but also because federal common law rules, as noted above, provide much unclaimed ownership in Delaware as a market leader in business creation. By law, the company is required to declare this property in the state of its last known address or in the founding state of the company. The company should analyze the remaining liability and decide whether it will begin to report annually in the future or whether it could file additional VDA reports. Factors that should help determine the direction to go are possible penalties and interest by state, possible exceptions and deductions, and the availability of internal resources. In conjunction with our consulting services, the unsolicited real estate specialists of Duff-Phelps help reduce risk and stay compliant with clients. In one case, Keane, after reviewing the company`s books and records, assisted management in submitting a VDA that waived all applicable interest and penalties and achieved significant savings on the limited scope of a VDA. In a second case, we learned that the client had undeclared obligations in 49 states.
The analysis revealed more than US$7 million in outstanding assets, with a potential fine of $17.4 million. Our consultants helped the company structure and filed several VDAs to avoid fines and penalties. The initial commitment was reduced by 83 per cent. More valuable, however, the company avoided 81 percent of the possible interest penalties. The first consideration after receiving a program invitation letter is participation. Since the letter often indicates that the state has intercepted a business for review, non-participation in the program likely leads to unclaimed real estate control. During the audit, the company loses some control over the process and will likely be forced to pay interest and/or penalties for all unclaimed unclaimed overdrafts. Other reflections on participation in the program are: As is clear above, unsolicited real estate coverage is a complex and extensive procedure.