California launches the unclaimed property voluntary compliance program

California Code of Civil Procedure 1577.5 authorizing the California State Controller’s office to establish the California voluntary compliance program (VCP) is effective as of Jan. 1, 2023. The controller initiated the VCP during the 2023 report year.

The VCP allows unclaimed property holders that haven’t completed timely unclaimed property reports to waive interest assessments on past-due unclaimed property reports. A holder may submit a form to express an interest in participating in the VCP on the California State Controller site to receive an application.

Required steps

Eligible holders enrolling in the VCP will be required to complete the following steps:

• Submit interest form to receive an application
• Participate in an unclaimed property educational training program within three months of enrolling in the program
• Complete an initial unclaimed property report (notice report) with a 10-year look-back period within six months of enrollment
• Conduct due diligence by making reasonable efforts to notify property owners
• Complete a final unclaimed property report (remit report) and surrender unclaimed or escheated property to the controller

Limitations

A holder isn’t eligible for the program if, due to a failure to report unclaimed property, they:

• Received notice of an impending examination
• Are under examination
• Received an interest assessment within the past five years or are facing prosecution due to a failure to report unclaimed property

Important dates

Applicants should keep in mind the following dates for eligibility and compliance purposes:

• July 31, 2023. Required training program must be completed
• Sept. 30, 2023. Due diligence deadline, completed to the extent applicable