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Indiana Attorney General Launches Unclaimed Property Self-Audit Program

February 21, 2020

Like all states, Indiana requires companies holding unclaimed property to report that property on an annual basis. Unclaimed property includes outstanding liabilities on a company’s books and records, such as uncashed payroll checks and customer credits.

The Indiana Attorney General, which administers the unclaimed property laws in Indiana, has recently launched an unclaimed property self-audit program. Under this program, businesses will be randomly contacted via mail to complete a self-audit. The Attorney General has engaged a third party firm to manage this program, and this firm is paid on a contingent fee basis. If a company receives a self-audit notice and fails to address it, a more complete audit may result.

Unlike tax examinations, unclaimed property audits do not have a statute of limitations. Therefore, the audit period tends to cover a much longer period of time. A number of bad facts can increase a company’s potential unclaimed property exposure, including high employee turnover, the practice of taking old checks or credit balances into income, or small balance write-off policies.

In the event you receive such a notice from the Attorney General’s office, please contact your KSM advisor to discuss next steps.

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