What is unclaimed property?
Unclaimed property can consist of stocks, bonds, cash or other property that your corporation has in its possession that may have reached the legal holding period. In addition, safe deposit box contents are delivered as unclaimed property too. Under a law passed by the Indiana General Assembly in 1967 and revised in 1995, personal property and money that has gone unclaimed for some time must be turned over to the Attorney General's Unclaimed Property Division. Under state law, unclaimed property must be returned to the state after it has been left with a "holder," such as a bank, insurance company, or other business or organization, and there has been no owner-generated activity in the account for a specific period of time and the company's attempts to contact the owner have been unsuccessful.
Who is required to report unclaimed property?
If your legal entity is a business association (corporation, partnership, etc.), governmental agency, or nonprofit you are probably required to file annual reports of unclaimed property.
Why do corporations have to report unclaimed property?
Unclaimed property laws were enacted to prevent holders of unclaimed property from taking citizens' unclaimed property and recognizing it as business income. This law gives the state an opportunity to return money to its rightful owners and provides Indiana citizens with a single source, the Office of the Indiana Attorney General, for unclaimed property that has been reported by holders from Indiana and around the nation.
Which states do I report to?
In 1954, the U.S. Supreme Court ruled in Texas v. New Jersey that the last known address of the owner determines the state to which unclaimed property is reportable. Furthermore, where the owner address is missing or incomplete, the U.S. Supreme Court ruled in Delaware v. New York that the asset is reportable to the state of incorporation of the holder. In addition, if the last known address is in a foreign country, the asset is reportable to the state of incorporation of the holder. Based on these rules, the addresses contained in a holder's database of dormant property determine which states should receive a filing. In addition, some states require reports to be filed even if there is nothing reportable to them for the current year. Indiana requires a zero report be filed and holders may do so online. The practical effect of these rules is that property can be reportable to many more states than those in which the company has a presence or does business.
When do I report?
Every state, including Indiana, has annual filing dates for which holders are expected to comply. Indiana and the majority of states have a November 1 annual reporting deadline. The one exception in Indiana is for life insurance companies, which must report on May 1. Many states have the right to assess interest and penalties for noncompliance.
What do I report?
The first annual filing with a state is called "initial compliance." Thereafter, reporting falls under Annual Compliance. Initial compliance should take into account all property types held by a corporation. In other words, if a company asks its Stock Transfer Agent to commence reporting of Capital Stock and Dividends, the company should be prepared to analyze its books for other property such as payroll checks, vendor checks and customer credits and report them as well.
To encourage first-time filers, many states have offered "amnesty" programs that exempt the holder from interest and penalties on reported property. Indiana's Unclaimed Property Division has the authority to waive penalties and reviews holder requests for voluntary compliance on a case-by-case basis.
Property is reported based on its dormancy or abandonment period. States are generally known as 3-, 5- or 7-year states. Indiana is considered a 5-year state. After property goes unclaimed for the requisite number of years it is eligible for reporting. Within a given state, there can be different dormancy periods depending on the property type. For example, Indiana requires payroll checks be reported after a 1-year dormancy.
Companies that have a history of reporting should be sensitive to changes in business practices that can give rise to new property types. Also, when companies are acquired, an analysis of their operations should be made to identify all reportable property types. The acquiree should conform to the acquirer's reporting rules.
How do I report?
Each state has unique reporting forms and formats that holders are expected to use. There are also industry-specific (e.g., banking and insurance) rules in each state. Indiana requires holder contacts to register initially online. Click here . Once your request is reviewed by our holder staff and approved, you will receive an e-mail containing an initial log-in link and temporary password.
There are mainframe and PC-based software packages that can aid large volume reporters. These packages produce reports for each state that meet all statutory requirements.
There are also service companies that perform unclaimed property reporting for clients. These services also produce reports for each state that meet all statutory requirements.
The nationally accepted format for unclaimed property reporting is NAUPA (National Association of Unclaimed Property Administrators). Holders must use this format when submitting the annual report of abandoned property. Holders may upload an existing NAUPA compliant text file or enter your report manually.
What if I have no unclaimed property?
If you have no unclaimed property to report, you are still required to file a negative or zero report. As of September 2004, zero reports may be filed online. Indiana requires holder contacts to register initially online. Click here . After you are logged in, you will be permitted to file a negative report using the "Create a zero report" function.
What is due diligence?
Indiana expects to receive property for the benefit of lost owners. How do they become lost? Addresses change, the property is lost or misplaced, records of amounts owed are destroyed, people pass away without adequate records of assets, etc.
Indiana does not want to receive the property of an owner who has an ongoing relationship with the holder or whose last known address in the holder's records is actually their current address. For this reason, Indiana and other states require that holders attempt to contact the owner about the property in advance of reporting it.
Indiana statute IC 32-34-1-26 (opens in new window) requires that due diligence be performed on all unclaimed property of $50 or more.
- All holders are legally bound to perform due diligence.
- Due diligence must be performed no more than 120 days, or no less than 60 days, prior to the filing of the report.
- Mail notifications must be sent to property owners by first class mail or better at their last known address.
Due diligence checklist
If you have performed all of the tasks described below, you have fulfilled your due diligence responsibility as a holder:
Can I be audited?
Yes.
If audited, the Holder will be responsible for the full cost of the audit and any associated administrative expenses.
Are there special record retention requirements?
Yes, but they vary by state. Indiana law requires that records be retained for ten (10) years after being remitted to the State
What about our foreign subsidiaries?
Generally speaking, foreign subsidiaries are not subject to U.S. unclaimed property laws. One exception could be dollar denominated disbursing accounts maintained in U.S. banks. However, as foreign governments enact unclaimed property laws, such as the recently enacted laws in Canadian provinces, additional levels of liability are created.
What if we are a subsidiary of a foreign corporation?
As a U.S.-domiciled entity, a company with foreign owners is subject to U.S. unclaimed property laws.
Do I have to report every year?
Yes. You must submit a report every year, even if you have nothing to report.
What if I have never submitted a report before?
A voluntary compliance program does exist if you have never submitted a report before. Click here to review the voluntary compliance program. All eligible property must be reported.
Are there penalties if I do not report?
Yes. Please see IC 32-34-1-45 (opens in new window).
What if I need to extend the deadline to report?
If you are unable to submit your report by the deadline, you must request an extension. Extensions are requested on corporate letterhead and must include the company name, FEIN, length of extension and a reason why the extension is needed. Extensions can be submitted via fax or regular mail. Once the request is received, it will be reviewed. If accepted, a letter will be sent.
What if I submitted a property in error?
If you submitted property in error, you can submit a request for reimbursement of the property. Click here (opens in new window) to review the procedures for submitting a request for reimbursement.
How do I report an Estate?
A signed court order is required when reporting funds from an Estate. The signed court order must include the name of the owner(s) of the funds and any identifying information (owner's last known address, date of birth, etc.).
Are safe deposit boxes reported the same way other property is reported?
Yes. They are reported in the same manner; however, we request the safe deposit box report to be separate from your regular annual report.
Please click the following link for more information: https://www.indianaunclaimed.com/attorneygeneral/ucp/holder_deposit.html
Are gift cards or gift certificates reportable?
No. Gift cards and gift certificates are exempt.
If my corporation is dissolving, what do I need to send to you?
A copy of the dissolution should be sent to this office.
You can find the appropriate forms by clicking the following link www.in.gov/sos/business/forms.html.
How do I report securities to the State of Indiana?
Please visit this link: www.in.gov/attorneygeneral/ucp/holder_stock.html
How do I report mutual funds to the State of Indiana?
Please re-register the mutual fund to the State of Indiana (using FEIN 35-6000158). Please forward any mutual fund statements to:
Office of the Indiana Attorney General
Unclaimed Property Division
35 South Park Blvd
Greenwood, IN 46143
What security measures does UP3 use?
The Indiana UP3 application guarantees secure access through the use of a dual set of operator IDs and passwords. When approved users of our system visit our site, they first have to enter a general operator ID and password. The UP3 application will then require users to create their own specific operator ID and password that positively identifies them and their specific level of access. All passwords are generated and encrypted using industry-standard best practices and non-reversible encryption algorithms, and managed in different tiers within the application infrastructure. No staff member or external user is able to access a user's password. The system also employs user-initiated reminders and email activation techniques.
All system traffic is encrypted using an industry standard 128-bit SSL.
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