Last Chance to Enroll in Extended Delaware VDA Program is September 30, 2014
DALLAS, Sept. 18, 2014 /PRNewswire/ -- Effective June 30, 2014, Senate Bill 228 ("S.B. 228") was enacted in Delaware. The Bill extended the period of time the Delaware Secretary of State may accept a letter of intent (DE VDA-1 Form) to enter into an unclaimed property Voluntary Disclosure Agreement (VDA) from June 30, 2014 to September 30, 2014, and further extends the sunset of the Secretary of State's VDA Program by one year from June 30, 2015 to June 30, 2016. According to the Secretary of State, no new companies will be accepted into the current Secretary of State's VDA Program after September 30, 2014. Companies that do not enter the VDA Program, and in particular those who have received a prior outreach letter, have an increased risk of being audited, likely by the Delaware Department of Finance.
The holder community should be aware of the following:
- Extension of VDA Program – The Delaware legislation extends the period that a holder may submit, and the Secretary of State may accept, the DE VDA-1 Form as intent to enter into the VDA Program. The firm deadline is set for September 30, 2014. Holders who sign up on or before September 30th have until June 30, 2016 to conduct their review and complete their VDAs with Delaware.
- Future of VDA Program – Jeffrey Bullock, Delaware Secretary of State, clearly confirmed that his office will not accept any new companies into the VDA Program after September 30, 2014. Mr. Bullock indicated in a recent email to various holders and holder advocates, "…we conducted unprecedented outreach, including sending a series of letters to over 1,000 companies, and held dozens of webinars and speaking engagements, to make thousands of Delaware companies aware of the Delaware VDA program and its many benefits." He indicated they had a positive response to their efforts, as evidenced by nearly 600 companies enrolling in the VDA Program.
- Failure to Enroll in VDA Program – Mr. Bullock stated that for those companies that have chosen not to enroll in the VDA program, "I can only surmise that these companies have made an informed decision that factored in the risks and the potential added costs of not participating in the program." It appears that companies that do not elect to enroll in the VDA Program will face a greater risk of audit by the Delaware Department of Finance and their contract auditors, particularly if the company was one of the 1,000 plus companies that had specifically received an outreach letter from Secretary Bullock's office. The Department of Finance audits have a much greater look-back period than would be the case under the Secretary of State's VDA Program. Our experience has been that such audits can routinely take three to five plus years to resolve, as opposed to much shorter periods (approximately one year or more) for a typical Secretary of State VDA to be resolved.
In summary, the holder community now has a very limited window of opportunity to take advantage of the Secretary of State's VDA Program by enrolling on or before September 30, 2014. Ryan's Abandoned and Unclaimed Property professionals are available to provide you with more details about the Program, the benefits of the Program, how it affects your factual situation, and the potential risk of not enrolling in the VDA Program.
About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the sixth largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a three-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 1,900 professionals and associates serves over 9,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.
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TECHNICAL INFORMATION CONTACTS:
Mark A. Paolillo
Principal
Ryan
857.288.1976
[email protected]
Susan Han
Principal
Ryan
442.244.2447
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