 |
 |
 |
|
|
September 1999 - Article 2 OHIO UNCLAIMED
FUNDS LAW Who is affected by the Ohio Unclaimed Funds Law? Actually, most
public and private businesses are subject to the Ohio Unclaimed
Funds Law. This law always existed but was never enforced, until
now. This law requires that monies and other intangible prop-erty
held by businesses but belonging to others must be reported and
remitted to the state after a specific dormancy period provided
in the law. While financial institutions and transfer agents have
complied with the statutes as to accounts and dividends, many other
businesses have unclaimed funds which have not been reported and
remitted. Previously, Ohio and other states have done very little
to enforce this law. What is the Voluntary Compliance Program? This program
is encouraging businesses to voluntarily comply with this law that
is being enforced without incurring substantial interest and penalties.
The required forms and submission of funds is required by December
31, 1999. Please be aware that Ohio has increased its audit staff
specifically for this area. Who is required to file an Unclaimed Funds Report? The Ohio Department
of Commerce, Division of Unclaimed Funds, requires that an annual
report, Form OUF-1, be filed by all businesses whether or
not they have unclaimed funds. Businesses include the following:
corporations, partnerships, sole-proprietorships, financial institutions,
nonprofit organizations, lessors, and all other entities that maintain
account balances, write checks, or hold funds in escrow. What constitutes Unclaimed Funds? Unclaimed funds are all intangible property that is not claimed by the owner within a certain period of time. The following is a limited list of unclaimed funds: • unclaimed
checks for payroll, commissions or pensions; Generally, the
funds are considered unclaimed if they are not given to the proper
owner within FIVE years. However, unclaimed checks for payroll,
com-missions and pensions are reportable if they are unclaimed after
ONE year. What are the consequences for failing to report unclaimed funds? If unclaimed
funds are not properly reported, there is a $100 per day penalty.
Additional penalties of $100 per day may be assessed if the Department
of Commerce requests a report and none is filed within four months.
Additional stiffer penalties can apply for refusal to comply. In
addition, unreported or underreported unclaimed funds may also be
subject to interest and penalties. What is the reporting period? The annual reporting
period runs from July 1st through June 30th. For example, accounts
payable checks and payroll checks that remain uncashed after one
year are considered dormant. Therefore, for the 1999 reporting (as
of June 30, 1999), accounts payable checks and payroll checks issued
on or before June 30, 1998 that remain uncashed are dormant and
must be reported. When is the report due? The annual report is due by November 1st of any given year. The unclaimed funds must be remitted with the annual report to: Ohio Department
of Commerce We are encouraging all of our clients to implement procedures to track unclaimed funds. It is recommended that you review your records for the past five years to determine if you have any unclaimed funds to report. If this is not possible, we are suggesting that you go back as far as possible. Compliance with this law is to your benefit and will avoid any unnecessary penalties and interest charges. Please note that even if you determine that you do not have any unclaimed funds to report, the Form OUF-1 is still required to be filed indicating that there are no funds to report. Remember, voluntary compliance is required by December 31, 1999. For forms and additional information visit the website for the Ohio Department of Commerce-Division of Unclaimed Funds at www.com.state.oh.us or call us at (216)524-8422.
Please call us if you would like to discuss the details of your particular circumstances.
Veres
& Company |
|