Again, it’s time to fulfill your annual requirement to identify and report unclaimed property to the state. This month of July is the time to begin the process.
Overview of the law
Under Indiana’s Unclaimed Property Act, virtually all businesses – including physician practices – are required to report and remit any “abandoned” unclaimed property on the books to the Office of the Indiana Attorney General (OIAG). That is whenever the property cannot be returned to its rightful owner.
“This law is not new, but compliance has historically been minimal,” said ISMA General Counsel Julie Reed. “In recent years, the state has identified this as a priority program and businesses should take it seriously.”
Unclaimed property is deemed abandoned when:
- The property has been inactive for a designated period of time (wages/paychecks for 1 year; credit balances of individuals not currently patients for 3 years)
- Your attempt to contact and return the property (money) to its owner through the due diligence process (explained below) has been unsuccessful. This year’s deadline for your 2012 report and remittance is Nov. 1, but due diligence should occur between July 1 and Sept. 1.
The due diligence process
To comply with due diligence obligations, you must:
- Audit your records annually between July 1 and Sept.1 to identify any unclaimed property.
- Identify owners of the property.
- By Sept. 1, send a letter via first-class mail to the owners of property worth $50 or more, alerting them about their unclaimed property.
- Return monies to the rightful owners when possible.
- For monies that cannot be returned to their rightful owners, report and submit to the state by Nov. 1, once aging requirements are met.
To avoid penalties and interest, report all abandoned monies regardless of amount to the state by Nov. 1. Of course, patient credit balances are not abandoned if they belong to current patients.
For more information, visit here or contact the OIAG’s office at (317) 232-6348 or (800) 447-5598 for a free consultation.