Maybe the owner of the check lost or tossed the check. While it may be hard to understand how checks can go un-cashed, it happens. Unclaimed checks, such ad payroll checks, commission checks, shareholder dividends, checks to vendors, and even unredeemed gift cards create problems for businesses. This represents a revenue opportunity for cash-strapped state governments. That could be an unfortunate combination if your company isn’t in full compliance with state law.
Unclaimed Checks
Generally speaking, the states do not allow businesses to hold on to un-cashed checks indefinitely. Each state has its own laws regarding unclaimed property. And businesses must follow the rules for reporting and remitting such property to the state.
In Texas, depending on the type of property, there are different periods ranging from one to fifteen years after which the state considers unclaimed property to be “abandoned”. And you must make a good faith effort to contact the owners during that period, so that they can claim their property. If these attempts fail, businesses must turn over the abandoned property to the Comptroller’s office. You can read more about Texas unclaimed property rules here.
States Want To Know
To supplement tax revenues, states have generally been stepping up their audit and enforcement efforts regarding abandoned property. For businesses, the cost of noncompliance can be quite high, especially if they haven’t been keeping reliable records. In the absence of records, auditors may — and often do — estimate a business’s liability. This may result in an exaggerated assessment.
Protect Your Business
Take steps to protect yourself by putting someone in charge of handling your business’s unclaimed property, keeping accurate records, regularly filing required reports of unclaimed property with the Comptroller’s office, and promptly turning over any unclaimed property according to Texas law. This helps you avoid costly problems in the future.
Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track.