Idaho is proposing a change to the state regulations on unclaimed property, relating to how holders handle owners that disclaim ownership of potentially reportable unclaimed property.
Background: During the reporting process, holders of unclaimed property are required to attempt to make contact with the owner of the property before reporting it to the state. This process, commonly referred to as "due diligence," involves sending letters to the owner's address, as it appears on the holder's books and records. Most holders give the owners an option to say that the money is not due to them or to allow the owner to disclaim ownership. The holders then maintain this written record, but then void the checks from their books.
The proposed regulation would require that the holders not only retain the signed due diligence letter, but holders would also have to keep the checks on the books for audit purposes. As written and commonly understood by practitioners, this would require companies to leave disclaimed Idaho checks on their outstanding check list "for audit purposes." This would also have the effect of distorting expense accounts for the company.
If this proposed regulation becomes effective, one would hope that a listing of voided checks that fit this criteria would be sufficient and that the holders do not have to keep the checks "on the books" indefinitely.
The full text of the proposed regulation reads: