How to Prepare for Unclaimed Property Filings
Unclaimed Property (UP), also known as Escheat, is one of the most commonly overlooked areas of compliance, and one of the riskiest to ignore. At Clarus Partners, we help businesses prepare for Unclaimed Property Compliance filings with expert support and a proactive approach.
Why Unclaimed Property Compliance Requires Attention
Unclaimed Property laws require businesses to annually report and remit financial obligations owed to third parties when contact has been lost over a specified number of years. These can include uncashed checks, customer credits, rebates, refunds, or other forms of outstanding liabilities.
Failure to comply can lead to audits, interest and penalties, and even reputational risk, especially for companies unaware of their exposure.
Who Must File Unclaimed Property Reports?
All 50 U.S. states, Washington D.C., Puerto Rico, the U.S. Virgin Islands, Guam, and several Canadian provinces enforce unclaimed property laws. Filing is not monthly like sales and use tax; instead, businesses must submit UP reports annually, usually in the fall or spring, depending on the jurisdiction.
Most states follow a fall reporting schedule, but a growing number require filings in the spring months, making it critical to understand your company’s Unclaimed Property compliance filing obligations each season.
Why UP Compliance Is More Complex Than It Seems
UP compliance is more than just filling out a form. One key requirement that sets it apart from tax filings is the due diligence process, states mandate that businesses send letters to owners of unclaimed property before turning assets over. This must be done within specific timeframes and meet state-mandated language and dollar thresholds.
With 54+ reporting jurisdictions, keeping track of due dates, dormancy periods, and due diligence requirements can be daunting. At Clarus Partners, we help businesses simplify this complexity.
Common Risk Triggers for UP Audits
Even if your company has filed UP reports in the past, certain patterns can increase your audit risk:
- Never filed before? ✅ At risk for audit.
- Missed key property types specific to your industry? ✅ At risk.
- Filed sporadically or skipped years? ✅ Also at risk.
- Filed $0 reports consistently without validation? ✅ Still at risk.
- Incorporated in aggressive states like Delaware, California, New York, or Illinois? ✅ High risk.
Delaware’s 2025 VDA Letters: A Timely Reminder
Delaware recently issued a new round of Voluntary Disclosure Agreement (VDA) letters on April 11, 2025. Giving businesses just 90 days to respond before being referred to a formal unclaimed property audit — often led by aggressive third-party auditors.
If your organization or any of its subsidiaries received one of these letters, it’s important to act quickly. Clarus Partners can guide you through the VDA process or help assess whether you’re at risk of receiving a letter in the future.
How Clarus Partners Can Help With Unclaimed Property Compliance Filings
Our Unclaimed Property services are led by industry expert Sonia Walwyn, who brings over 30 years of experience to the table. The Clarus UP team helps clients:
- Navigate annual filing requirements
- Track and manage due diligence timelines
- Stay ahead of legislative changes
- Prepare and file voluntary disclosures
- Defend against audits and minimize exposure
Whether you’re behind on past filings or unsure of your Unclaimed Property obligations, Clarus Partners can help you meet deadlines and reduce audit risk.