Key Takeaways:
- Delaware continues to issue verified report notices that can require companies to certify their unclaimed property reporting and provide supporting information within specified deadlines.
- Texas is sending outreach letters to companies that may have outstanding unclaimed property reporting and remittance obligations.
- Companies receiving notices from either state should respond promptly and review their records, reporting history, and unclaimed property compliance procedures.
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Delaware and Texas continue to take steps to identify companies that may have unclaimed property reporting obligations, issuing notices that can require recipients to review their compliance positions and take action within relatively short timeframes.
Companies receiving these communications should understand what is being requested, carefully evaluate their reporting history and records, and respond within the applicable deadlines.
Delaware
The Delaware Department of Finance, Office of Unclaimed Property, has issued verified report notices to companies, including some that may have filed for the most recent report year and others that may not have filed.
For reports that were due March 1, 2026, Delaware may require a holder to complete a verified report analysis under Section 1170(a) of the Delaware unclaimed property law within 180 days of the notice date.
Although a verified report request is not a formal audit, it represents an important compliance enforcement action. The notice generally asks a company to certify that its most recent annual report is complete and accurate or confirm that it had no property to report.
Through the verified report process, Delaware can evaluate a holder’s reporting position, request follow-up information, identify potential omissions or errors, and assess whether the company has implemented appropriate unclaimed property policies and procedures.
The Office of Unclaimed Property administers the program, often with support from third-party firms. Delaware significantly expanded its authority through legislation enacted in June 2022, allowing the Office of Unclaimed Property to request a verified report from any company, regardless of its filing history or perceived compliance profile.
A verified report notice typically requires companies to:
- Respond within 30 days of the notice date.
- Submit the requested information as soon as possible, but no later than 180 days from the notice date.
- Provide a list of the legal entities included in the verified report.
- Disclose whether the company has written unclaimed property policies and procedures and provide copies, if available.
Delaware generally does not allow extensions. Failure to respond, an insufficient response, or deficiencies identified during the process could result in escalation, including an examination notice or an invitation to participate in the state’s voluntary disclosure program.
Delaware has indicated that the verified report process will be annual, with notices typically issued in the summer. The state also mails voluntary disclosure invitations each spring and summer, and additional audit notices are common as the year closes.
Insight
A Delaware verified report notice should not be treated as a routine administrative request. Companies that receive one should act promptly to understand the scope of the request, assess the completeness and accuracy of prior reporting, and gather the documentation needed to support their position.
A thorough and well-documented response can help mitigate the risk of escalation and place the company in a stronger position to address Delaware’s compliance expectations.
Companies should also use the remainder of the year to prepare for the March 1, 2027 report, since the accuracy of that filing may be tested in next year’s round of notices.
Texas
The Unclaimed Property Division of the Texas Comptroller of Public Accounts has also issued unclaimed property compliance and reporting outreach letters to companies that may not be in compliance with Texas unclaimed property reporting requirements.
In general, the letters state that the recipient, along with its subsidiaries and related entities, may have an obligation to report and remit unclaimed property to comply with Texas Property Code §§ 74.101 and 74.301.
The letters typically require a response within approximately 30 days. Companies then generally have 60 days to file a report. The outreach also provides an option for a business to indicate that it has no reportable unclaimed property and will submit a negative report.
Insight
Companies should take these notices seriously, particularly if they operate in Texas, have Texas-incorporated entities, or have significant business activities in the state, including sales, property, or payroll.
Recipients should promptly review their books and records to evaluate whether they have reportable unclaimed property and determine the appropriate response. Combining that review with a broader assessment of unclaimed property policies and procedures can also help companies identify potential compliance gaps before they result in additional scrutiny.
How MGO Can Help
Unclaimed property compliance can be complex, particularly for organizations operating across multiple states or managing numerous legal entities. State outreach and enforcement efforts can also expose gaps in historical reporting, recordkeeping, and internal processes that may extend beyond the specific period addressed in a notice.
MGO can help your company evaluate Delaware verified report notices and Texas compliance outreach, review historical reporting and underlying books and records, identify potential unclaimed property exposure, and prepare appropriate responses. Our professionals can also assess existing policies and procedures, identify opportunities to strengthen ongoing compliance, and help organizations navigate voluntary disclosure or other remediation options when appropriate.
Contact us to discuss your organization’s unclaimed property reporting obligations and how MGO can help you address potential compliance risks.