If your organizational structure includes Delaware entities, you may have recently received an invitation to participate in Delaware’s Voluntary Disclosure Agreement (VDA) program administered by the Delaware Secretary of State’s office. Delaware will encourage participation in the VDA program by sending out invitations one to two times per year to companies potentially identified as being out of compliance. For 2023, Delaware sent out invitation letters on February 24 and will send out invitations to additional companies on July 14.
For those receiving invitations, there is a 90-day window to accept the invitation to participate in the VDA program. This invitation should not be taken lightly, as any company that does not choose to participate in the VDA program will be subject to an unclaimed property audit administered by the Delaware Department of Finance. For any companies that received the February 24 invitation letter, a response is due to the Delaware Secretary of State no later than May 25.
Historically, unclaimed property administration and enforcement has been overseen by the Delaware Department of Finance along with third-party auditors representing them. In 2012, Delaware developed the VDA program through the Secretary of State’s office as an alternative to the traditional audit route to further promote holder compliance. The VDA program has continued to evolve since adoption.
For each VDA, the Secretary of State will engage one of three third-party vendors to perform most steps of the VDA from the state’s perspective. For the company participating in the VDA, they will primarily interact with these vendors during this process (either directly or through their own advocate firm).
Benefits of the VDA program include limited look-back periods, some flexibility in scope, faster review times than traditional audits, and full penalty/interest waiver on any outstanding balances due.
If you did receive a notice from Delaware, it is important to weigh the two options – 1) participation in the VDA program, or 2) undergo a full Delaware unclaimed property audit. If choosing the VDA route, you should respond to the notice as soon as possible to help ensure that participation in the VDA program is secured. Our knowledgeable professionals at FORVIS can offer unclaimed property assistance, help you navigate the decision process, and provide support during the VDA or audit process.
If you did not receive a notice but are still considering a VDA outside of the invitation process, please reach out to a professional at FORVIS or submit the Contact Us form below.