At a recent seminar we attended, the Michigan Department of Treasury gave a presentation regarding an upcoming State initiative for unclaimed property. Beginning in August 2005, some business taxpayers will receive a letter from the State informing them of the Uniform Unclaimed Property Act and the need to file unclaimed property reports for the past four years within 90 days. Other business taxpayers will be notified that they have been selected for an unclaimed property audit covering the past ten years.

Until this current initiative, the State had never actively pursued enforcement of this 1995 Act. For those taxpayers that voluntarily comply and file past-due reports, or for those responding to the "four-year" letter, no penalty or interest will be assessed. However, for those businesses selected for an audit, penalty and interest will be assessed.

In order to avoid a potential audit covering the past ten years, we are advising voluntary compliance with the law.

Unclaimed property that requires reporting include the following: vendor checks issued that remain uncashed after five years; uncashed payroll checks after one year; stock/dividend checks uncashed after three years; and outstanding accounts receivable credit balances after five years of no activity. Every business that has unclaimed property belonging to someone whose last known address is in Michigan must report and remit the property to the Michigan Department of Treasury. The State of Treasurer takes custody of the property until which time the rightful owner (or heirs) file a claim.

If you desire to voluntarily comply and want us to prepare the reports for you, please call. If you choose to prepare the reports internally, the forms are available at www.michigan.gov/treasury, then proceed to the "unclaimed property" link.

For more information on any of our services, please e-mail us at pmiller@millerpc.com or call (734) 971-3900.