Property

Unclaimed Property – Zero Balance Reporting Requirement Rescinded

Kristi Krafft-Bellsky

New Online System

Beginning October 1, 2018, a new system is accessible on the Michigan Department of Treasury’s website for both reporting unclaimed property and filing to receive unclaimed property.

  • Business and individuals can search for unclaimed property in their name and submit validation information online to claim the unclaimed property.
  • Holders of unclaimed property can file reports and make payments electronically.

The new electronic filing system allows for ease in reporting. Access the new system at https://unclaimedproperty.michigan.gov/.

Zero Balance Reporting

As reported in an earlier Yeo & Yeo eNewsletter, when the 2018 Reporting Manual was issued in April, the Michigan Department of Treasury removed the requirement to file a zero balance situation, where a business does not have any old outstanding checks that would meet the requirement to escheat the funds to the State. The Treasury still recommends that entities file a zero balance report to maintain a history of reporting. If this describes your situation, and you have not reported, you can find Form 2011 on the website and upload it.

Deadlines for reporting

  • Current rules require the unclaimed property to be identified as of March 31 of each year and reported to the State on or before July 1.
  • Once properties have been identified, organizations must prepare and mail due diligence letters to the property owners by April 15.
  • By May 15, organizations must determine which property owners have not responded to the due diligence letters.
  • Then, starting on June 1, organizations should begin preparing the annual unclaimed property report.

Property that has reached its applicable dormancy period as of March 31 must be remitted with and reported on Michigan State Form 2011, Michigan Holder Transmittal for Annual Report of Unclaimed Property, and the appropriate annual reporting form (there are separate forms for cash and safe deposit boxes, and for securities). If the holder (business or government entity) has more than ten items to report, they must use electronic media for the annual report. The due date for this filing was July 1 (or the next business day if the 1st is on the weekend).

Penalties for failing to report

Fines and penalties may be assessed for organizations who fail to submit reports. Fines may be imposed of $100 per day for each day that the report is withheld, or the required duties outlined in the previous paragraph are not performed, not to exceed $5,000. Also, a 25 percent penalty on the value of the property that should have been paid or delivered may be assessed in addition to interest charged from the date that the property should have been delivered to the State of Michigan.

Voluntary Disclosure

Entities that would like to avoid penalties and interest charges on property that they are delinquent in reporting can become compliant by filing a Michigan Unclaimed Property Voluntary Disclosure Agreement (From 4869). If approved, then the holder will be notified of the obligation to complete and submit the proper reports for the current reporting year and four previous reporting years, and should remain current in reporting going forward. The instructions and form are all available in the 2018 reporting manual.

 

Kristi Krafft-Bellsky

Kristi Krafft-Bellsky

CPA

Kristy Krafft-Bellsky, CPA, Director of Quality Control, is responsible for internal quality control throughout Yeo & Yeo’s nine offices. She oversees the development and implementation of policies and processes to comply with professional standards and regulatory requirements. She also manages the peer review process. Kristi led the development of the firm’s award-winning LEAN Audit Process that significantly benefit the firm’s clients and professional staff. She is a member of the firm’s Audit Services Group and Education Services Group.