Audit notices
An unclaimed property audit notice is a formal notification from a state, informing a business that it's being audited for compliance with unclaimed property laws.
What risks does an audit pose?
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Excessive exposure to the states through aggressive audit methodologies
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Time-consuming burden that can span two to five years and divert key resources
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Potential disclosure of confidential information beyond what's legally required
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Lack of audit trail documentation for future reference
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Risk of overpayment due to aggressive interpretation of state laws
Immediate steps to take
- Don't ignore the notice
- Failure to respond appropriately can result in default judgments, penalties, or interest assessments.
- Understand the scope
- Review which states are participating in the audit, which entities within your organization are included, and what time periods are covered.
- Engage professional expertise
- Consider working with unclaimed property specialists who understand state-specific requirements and audit methodologies.
- Develop a response strategy
- Create a plan for managing communications, document production, and internal resource allocation.
- Preserve attorney-client privilege
- Consider employing the assistance of external legal counsel to protect company data and findings discovered by holder advocates.
How Sovos can help
Sovos Unclaimed Property Consulting provides comprehensive audit support services that help organizations navigate these complex examinations efficiently while protecting company and client assets.
Our approach includes:
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Strategic response planning to manage the audit process effectively
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Review of information requests to verify that only relevant materials are provided
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Analysis of potentially escheatable populations to identify exemptions and opportunities for remediation
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Coordination of communications with auditors and states
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Validation of liability assessments and extrapolation methodologies
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Verification of dormancy periods and other state provisions
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Assistance with final assessment negotiation and audit closure
Interested in Sovos Unclaimed Property Consulting services?
Contact us to discuss your organization's unclaimed property needs.