November 1 Deadline to Avoid Unclaimed Property Reporting Penalties

by Angela N. Crawford, CPA | Tax Services Group

Under Indiana law, nearly every business organization is required to annually report unclaimed property to the Indiana Attorney General’s office by November 1. The penalty for failure to file is $100 per day late, up to $5,000.

Now that you know you have to report it, what is unclaimed property? Unclaimed property is property your company has in it’s possession in which there has been no activity from the owner of the property and attempts to contact the owner have been unsuccessful. Some examples are un-cashed payroll and vendor checks. Indiana considers the property unclaimed after five years, except payroll checks, which have a one year limit. Prior to reporting an item, a company must perform due diligence in contacting the owner. Help in this process is provided at http://ucp.indianaunclaimed.com/attorneygeneral/ucp/holder_faq.html#2.

If you have more than 20 unclaimed property items, you are required to file your report on-line at www.IndianaUnclaimed.com/reporting. The website has tutorials for completing your forms on-line.

If you have no unclaimed property, you are not required to file a report. However, the Attorney General’s office strongly recommends you file a zero report. Filing a zero report can demonstrate awareness of the requirement and is considered a good practice by most business advisors.

If your organization has been annually filing the reports, continue to do so. If your company has never filed an unclaimed property report, Indiana has an amnesty program available until November 1, 2010, allowing companies to be compliant with state law without the fear of penalties.

More information and frequently asked questions can be found at the websites listed above.