What is Voluntary Compliance?
Voluntary compliance provides an opportunity for eligible holders of unclaimed funds to voluntarily report past due items. The Office of Unclaimed Funds (OUF) agrees to waive penalties and interest associated with the reported items if the holder complies with the terms of the program. Participants in the program must file Abandoned Property reports. After completing either compliance program, companies are expected to comply with New York State Abandoned Property Law (APL) going forward. Participating in the program is voluntary, however, complying with the NYS APL is a legal requirement.
All companies are subject to the NYS APL, including foreign corporations not authorized to do business in NYS (§1312). Unclaimed funds due to an individual or business with a last known address in NYS are reportable to NYS in accordance with the rules of jurisdiction set by the United States Supreme Court. Companies should fill out the self-audit checklist to determine reporting liability. A reach-back period of ten years plus the dormancy period applies to general ledger items.
Benefits of voluntary compliance:
- Submit a report within six months of acceptance to receive amnesty from penalties and interests on the reach-back period.
- Reunite owners with their lost funds.
- Access to an auditor dedicated to responding to any questions.
- Company can perform a full review independently with oversight.
- Be compliant with state laws.
- First-time reporters of unclaimed funds to the NYS Office of Unclaimed Funds.
- Companies who have not been contacted about an Audit of Unclaimed Funds by NYS.
- Some exceptions can be made to previous reporters on a case by case basis, such as correcting a previous mistake. Contact the Voluntary Compliance Unit (VCU) to check for eligibility.
1. Self-Directed Compliance Program (SDCP)
- A self-directed review done by the company either internally or by a hired professional service provider.
- OUF sends invitations to companies who have never filed a report of Unclaimed Funds to New York State. The purpose of the invitation letter is to:
- Educate businesses on APL.
- Extend an offer for companies to enter the compliance program.
- Provide a tool (self-audit checklist) to help identify items that may be reportable as Abandoned Property.
- You can request an invitation by contacting VCU if you have not received an invitation letter. Provide the company name(s), Federal Employer Identification Number(s), mailing address and contact person information. We will reply with a letter and reference number.
- Complete the self-audit checklist if you have received the invitation letter. The self-audit checklist is supported by Microsoft Forms. Depending on the response, this will serve as an enrollment application for the SDCP. After you submit the checklist, the office will contact you via email if your answers identify that your company is holding unclaimed funds. Provide a valid phone number and email address.
- Complete the checklist even if you do not think your company is holding any unclaimed funds so that we may update our records. We will only contact you again if follow up is needed.
2. Voluntary Compliance Agreement (VCA)
- A formal agreement between the company and OUF. You will work with the office on a plan to thoroughly review your company’s books and records. This review is also performed by the company either internally or by a hired professional service provider. If you are audited after the VCA is complete, the property covered under the VCA would be excluded from audits.
Acceptance through either Voluntary Compliance option is subject to approval.
After Acceptance into VCP
- Complete the review of your company’s records to identify all unclaimed funds and rightful owner information.
- The reach back period is 10 years plus dormancy on general ledger items.
- The reach back period for other types of property can be found in the APL, or contact us if you have a question.
- Prior to reporting, complete due diligence. This is required under the APL and takes a minimum of 90 days.
- Submit your report and payment within six months.
- If you need additional time, companies may apply for a one-time extension up to 60 days. Extension request forms must be submitted at least 30 days prior to the report due date.
- For the VCA, follow the guidelines of the Audit Representative you are working with.
What could happen if I was accepted into the VCP and I don’t file a report?
- Accepted companies are expected to comply with the APL.
- Companies could lose the opportunity to file within the amnesty period and be subject to penalties and interest.
- Companies could be subject to an Audit of Unclaimed Funds.