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Do you report ‘unclaimed property’ to the state as required?
e-Reports, April 5, 2010
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New amnesty program lets you comply by Nov. 1 without paying interest and penalties

A duty has existed since 1997 for businesses – including medical offices – to comply with the state’s Unclaimed Property Act. It requires making a report each year, even if you have no unclaimed property on your books or if the value of any unclaimed property is minimal.

“The law pertains to, for instance, patient credit balances and unclaimed employee payroll or expense checks,” said Julie Reed, ISMA legal counsel. “However, the law does not pertain to balances on your books for any current patients in your practice, and property must be abandoned, according to state timelines before it must be reported.”

Along with the report, any unclaimed property must be turned over to the Office of the Indiana Attorney General. If you have several minimal patient credit balances (less than $50), you may submit an aggregate report rather than report on the balances individually.

Some details and suggestions
Before reporting unclaimed assets of more than $50, you must attempt to contact the owner; this process is called due diligence. To comply, send a letter via first class mail to the last known address – no less than 60 or more than120 days before the state’s Nov. 1 reporting deadline.

Property is “unclaimed” and must be reported if you cannot find or contact the owner after the following period of years:

Wages/payroll checks - 1 year
Patient credit balances - 3 years
Employee expense checks - 5 years

For more about the amnesty program and reporting, see here.

Review helpful frequently asked questions at this Web site.

That means you must be doing due diligence (making contacts on accounts over $50) between July 1 and Sept. 1. “Calendar those dates or ask your auditor or accountant to send you a reminder each year,” suggested Reed.

If you find the owner, mail a check to return the balance. If you do not find the owner, report the amount to the state as unclaimed property if it meets the abandonment timeline. Due diligence can be performed on property worth less than $50, but is not required. Otherwise, just report it to the state.

“If you’re not sure if you have registered with the attorney general’s office and submitted reports previously, call the Unclaimed Property Division and ask. You may also request a free consultation to help you identify property that must be reported,” noted Reed.

Call (317) 232-6348 or (800) 447-5598.

Current amnesty program
The state has instituted a one-time only Unclaimed Property Amnesty Program to help businesses comply under the law without paying fees, penalties and interest.

“If you have not reported unclaimed property in the past, you are subject to penalties,” explained Reed. “That’s why you should catch up now, while amnesty is available.”

To participate you must:

  1. Complete the Amnesty Agreement available online (see box above), sign and mail.
  2. Register your account on the division’s Web site (see box).
  3. Submit unclaimed property reports – one for each of the last 10 years, even if you have nothing to report – and remit all funds to the state before Nov. 1.

State representatives indicated only about 5 percent of qualifying businesses now report, as required by law. Following the amnesty period, enforcement and audit efforts will be ramped up.

The state wants businesses to file annual reports electronically; paper filing is acceptable if reporting on less than 20 properties.

Once unclaimed property is reported, the state posts it on its Web site where owners can search and claim it. “You’re also advised to check the site for money that may be owed to you,” Reed added.

Here are key points to remember:

  • If you file a report for any property and have the last known address of the owner, keep those records for 10 years.
  • You cannot report early; you must wait the statutory period of time before reporting, unless the attorney general’s office approves.
  • The state will not send you any information on the amnesty program. If education opportunities become available, the ISMA will advise you.
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