Your company has just been notified that it is under audit by one or more states for your compliance with unclaimed property laws. Typically, the letter would come from a state and direct you to contact a third-party auditor to proceed. Stop! Before you call the auditor, you should call Barganier to guide you through the complicated process of an unclaimed property audit.
Unclaimed property audit defense usually falls to members of the company's tax or accounting department. While these professionals may be familiar with tax audits, unclaimed property audits are a hybrid beast like no other. These audits can take years to complete, disrupting the normal operations of the department. The audits dive deep into the policies, processes, and inner workings of your company. They often pose difficult questions about the whys and the hows of the processes you have implemented, often decades before. This is a lot of pressure on your department without many written rules for the auditors to follow.
Here's the top three reasons why you should not rely on in-house experience to defend the company against an unclaimed property audit.
1. Benefit from the experience of other companies.
How many unclaimed property audit defenses has your team conducted? What are their results as validated by final assessments? How does your team measure results? How does your team navigate the unknowns of the “wild west” of 50 state unclaimed property statues and regulations? Does your team know what the unwritten rules of unclaimed property audits? Do they know how the different states interpret the rules differently? Can they combat the state policies when they go beyond the scope of the statutes? Many companies have gone through audits before you, resulting in drastically different outcomes.
What sets the good results apart from the bad results? While you cannot change the underlying data, the outcome is often dependent on strategic decisions made by the audit team. What if you could combine the experience of many companies to develop your defense team? You'd jump on that in a heartbeat! Learn from the pain that others have gone through before you and don't repeat their mistakes.
2. Benefit from the deep experience of our unclaimed property experts.
The Barganier team does one thing and one thing only - unclaimed property. This gives us an unparalleled subject matter expertise which you will benefit from. Our project managers started in compliance, so they understand the business realities behind the compliance process and apply this knowledge during audits. They have also developed beneficial professional relationships with various state administrators and other officials that will benefit your company in dealing with inevitable roadblocks during an audit.
Our professionals can serve as your guide to know when to push back on auditor requests for being overbroad and beyond the scope of the auditor's authority. And how do you defend against an extrapolation? By statute, extrapolations are required to be reasonable. In practice, we have seen that these extrapolations are anything but reasonable. Our team of finance, math, and legal professionals can combat how the auditors create and apply an extrapolation to your facts and circumstances. Without the experience of defending against multiple extrapolations, your team may not have the tools to dissect and critique the extrapolation put forth by the auditors.
Would you go to an eye doctor for a heart transplant? Of course not! But what if you could integrate with your team over 30 years of audit defense and unclaimed property reporting expertise from a legal, accounting and technology viewpoint with a successful track record of ZERO assessments? You'd jump on that in a heartbeat!
3. Anticipate and Proactively Handle Possible Problem Areas.
You have millions of rows of data. Can your personnel and systems identify the problems in a quick and efficient manner so that you can proactively work to address them? How do you mitigate the risk to prevent additional states from auditing your processes or the same states from coming back in 5 to 10 years to do a follow-up audit? Barganier can proactively identify issues, address them at the proper executive level, and work towards solutions that will satisfy both internal and external constituencies.
Do you need to create reserves for potential audit liability? If so, you want the backing of an external firm to help you create an accurate assessment of potential liability so that you neither under or over-estimate the reserve amount. Because of our experience over several decades, Barganier knows what to expect in audits and can accurately assess the range of possible outcomes for your company.
Unclaimed property audits are unique in the auditing world. The requests are burdensome and invasive. They are disruptive to your business. Proper guidance can reduce the burden and enable you to continue other, more productive pursuits.