Unformatted text preview: listed U.S. companies to incorporate there. But America's first
state has a harsh side: It is one of the most aggressive in calling dibs on "unclaimed property,"
such as uncashed paychecks and unused gift cards, miring companies in years of audits and
costing them millions.
Under Delaware law, companies incorporated there must turn over unclaimed property to the
state if they can't locate the owner. The state gets unclaimed securities and dividends after three
years. For all other types of property, such as gift certificates, the state claims possession after five
The rule has long been criticized as a revenue scheme on the part of the state, and has spurred
substantial pushback from the corporate community.
"You can't be nice with one hand and slap us with the other," said French Slaughter, a tax lawyer
in the Washington office of McGuireWoods LLP, who has represented several companies audited
by the state for unclaimed property.
Aware of the backlash, and hoping to decrease the number of audits, Delaware last summer rolled
out a temporary voluntary-disclosure program, a sort of amnesty under which companies that feel
they owe back payments to the state can calculate what they believe they owe and pay it...
View Full Document
This document was uploaded on 02/17/2014 for the course ACCTG 215 at University of Washington.
- Spring '08