Unclaimed Property Laws
Recently you may have received a letter from New York State that discussed your responsibilities under the unclaimed property laws.
Of
course your initial thought was the same as ours was. “ This regulation obviously does not impact
us. Why are they bothering us with this
drivel?”
Well,
surprise to you and to us! It can apply
to us. Here’s the scoop.
One
obvious application is a check that you have written to a vendor or an employee
that never was cashed. If Freddy worked
only one hour the last day before he was terminated, and his last paycheck was
for a gross of $8.50, he may have not cashed the net check. Six months later, you are still carrying
that check as an outstanding check every month when you are doing the bank
reconciliation. In frustration with
him, you make a journal entry to reverse the outstanding check, because you
feel that he probably will never cash the check.
That
is a classic unclaimed property, which is subject to your reporting it to the
state for dissemination to the rightful owner.
Another
application of unclaimed property is if a customer overpays their invoice that
you have sent them. Instead of a
receivable, you now have a payable to your customer. If you never refund the amount, it is another instance of
unclaimed property.
What
is the hullabaloo about unclaimed property?
The issue at stake is that you can be fined for not reporting the funds
to the state!
As
we are all aware, the states are looking for new ways to obtain funds for their
coffers. This may be just the one
opportunity that you are given to help them close their budget gaps.
What
is our opinion? We feel that there
probably is no good reason to give the government any additional funding,
especially with your hard-earned money.
If you would like us to assist you in reviewing your records for items
that should be reported to the government, we would be available to help. The important thing is to start now to
rectify any outstanding issues that may be impacting your records.
Please
call if we can be of assistance.
