By Judy Mason, CPA, CVA, CEPA – Partner and Joseph P. Roznai, CPA, CGMA – Partner
The Illinois Treasurer requires all businesses and not-for-profits to file annual unclaimed property reports. These reports are due May 1st and can be filed online at https://icash.illinoistreasurer.gov/app/submit-a-report. Even if an entity is not holding any unclaimed property they must still file a negative (no unclaimed property) report. The unclaimed property report and any related payment are due May 1st of each year.
Unclaimed property consists of intangible property that is owed to others and generally includes checks that were issued and not cashed by the recipient, voided checks not reissued, customer deposits, unpaid customer refunds, customer overpayments, and uncashed payroll checks.
- The deadline for filing the unclaimed property annual report is May 1st following each year. The report should reflect one year of account activity three years before the last calendar year. The report, due May 1, 2023, will cover activity from January 1, 2019 through December 31, 2019.
- Entities are required to send due diligence letters to owners of unclaimed property for any property valued at $50 or more.
- Gift cards and merchandise credits are exempt. However, general purpose cards that charge fees or have expiration dates remain reportable unclaimed property when not used for five years.
- Business-to-business transactions are considered unclaimed property which includes payments to vendors and service providers.
- Uncashed payroll, commission, bonus, and reimbursement checks, or other compensation for personal services must be reported after being outstanding for only one year. Such payments unclaimed from calendar 2021 should be included on your report due on May 1, 2023.
- It is required that supporting records are maintained for a minimum of 13 years.
- All unclaimed property reports are to be filed electronically at: https://icash.illinoistreasurer.gov/app/submit-a-report.
- We recommend that you annually review your records as of each December 31st for all old outstanding checks, customer deposits, credit balances, and the like and attempt to return the funds to the true owner. Illinois requires an attempt be made to contact and return the funds to the true owner before remitting the funds to Illinois.
The Illinois State Treasurer’s Office (ISTO), can audit all years for which an unclaimed property report was not filed. Recently, more ISTO audits have been initiated as online self-audits. This requires you to review your prior years’ records and self-report all unclaimed property found during the audit period. The department also conducts actual audits with the help of outside third-party auditors. These audits can be time-consuming because of the significantly long look-back period of 13 years.
A Voluntary Disclosure Agreement (VDA) program allows businesses with compliance issues from prior periods to become compliant. In exchange for voluntary compliance, the ISTO will forgo the right to assess penalties and interest on past-due unclaimed property. Entities currently under examination by the ISTO or an agent of the ISTO are ineligible to participate.
The MichaelSilver professionals have extensive experience assisting clients in properly reporting unclaimed property. Please call us at 847.982.0333. If you think you are holding unclaimed property, or you are not sure if you may have such exposure, we would be happy to assist you.