Delaware Pushes Audit Revenue to Next Year

DEFAC, the Delaware Economic and Financial Advisory Council, released its latest forecast and pushed approximately $40 million of abandoned property to next fiscal year. Finance Secretary Tom Cook said that the $40 million move is due to audits that they no longer expect to close before June 30, 2016, the end of the fiscal year. Unclaimed property remains the third largest source of "revenue" for the state, behind only personal income taxes and business franchise taxes.

The revenue projections are available from DEFAC. (opens in new tab)

One reason that the state cannot expect to see audits close before June 30 is that many companies are eagerly watching several high-profile cases in federal court. Temple Inland, Idenix shareholders, and Marathon Oil could all have material impacts on ongoing audits, including how the state performs extrapolations when records are not available, whether foreign property is reportable, and how special purpose entities are to be treated during audits.

Currently, the revenue forecast only moved the amounts down the road, but a decision in any one or more of the contested cases could lead to drastic changes for holders and thus the state. Delaware revenue figures could also be impacted by a decision in Pennsylvania's favor in the Pennsylvania v. Delaware case, which will determine the appropriate state to escheat certain official checks issued by Moneygram.

See Also:
Delaware Releases Proposed Audit Regulations
Delaware Sues Blackhawk over Rebate Audit
Overreaching State Authority in Unclaimed Property Audits