Delaware leads unclaimed property compliance as states increase enforcement

Delaware VDA invitations

Delaware’s VDA program is arguably the most comprehensive unclaimed property compliance initiative in the country, featuring a 15-year lookback period for most property types. Designed to be completed within two years, the program offers companies an opportunity to voluntarily come into compliance with the state’s unclaimed property laws while avoiding the burdens associated with a state-initiated audit.

Through this self‑directed review, companies maintain greater control over the process and benefit from penalty and interest waivers for past due property, indemnification for the periods covered and a typically faster resolution when compared with traditional audits. Companies may enter the Delaware VDA program proactively or by responding to a formal invitation issued by the state.

Delaware has announced two anticipated mailing dates for its formal VDA invitations in 2026:

• April 10, 2026
• Aug. 14, 2026

These invitations are time-sensitive and should be routed immediately to the appropriate finance, tax or legal decision maker upon receipt. Prompt action is critical should your company become a target.

A Delaware VDA invitation is more than a compliance reminder; it is a decision point with multi-year consequences. Invitation recipients have 90 days to enroll in the VDA program. Failure to enroll within that window will result in a state-initiated unclaimed property audit. Unclaimed property audits require the same 15-year lookback period, but companies lose control of the process, as these are driven by third-party audit firms that specialize in unclaimed property exams. These audits typically last three to five years or longer, requiring a significant investment of a company’s time and resources.

For many years, Delaware’s enforcement strategy centered on the VDA invitation. However, the state has recently shifted toward a more diversified approach, adding new compliance tools, such as the Verified Report requests, which are discussed below.

Delaware Verified Report requests

Another facet of Delaware’s ongoing strategy to promote compliance with unclaimed property laws is the Verified Report request. These requests focus on a company’s most recent annual unclaimed property filing and are administered with support from third-party audit firms.

Although Verified Reports were originally intended to confirm data reported by companies, Delaware has increasingly issued these notices to companies that have not historically filed.

Once received, a non-filer has limited options, including performing an analysis to complete the Verified Report requirements, entering the state’s VDA program or waiting for an audit notice. With Delaware’s practice of sending these requests to both filers and non-filers, all companies should remain vigilant.

When received, a typical Verified Report request requires:

1. A verification that all escheatable property for the applicable report year was fully reported, or alternatively, that no reportable property existed;
2. A listing of legal entities included in the submission; and
3. Information about and/or copies of unclaimed property policies and procedures.

Timing is a common concern for companies going through Delaware’s Verified Report process. A company must provide complete responses to the request within 180 days of the request date. An initial acknowledgement of receipt of the Verified Report request is also required within 30 days.

Although a Verified Report is limited to a one-year review, the implications can be significant. Non-response or incomplete responses may trigger escalation, including the initiation of an audit. Given these risks, companies should treat these requests as structured compliance projects rather than administrative, check‑the‑box tasks. A disciplined approach helps ensure timely responses, accurate documentation and reduced exposure to enforcement actions.

Preparedness is key, and Delaware’s ‘notice-first’ approach means organizations should prepare before a VDA invitation or Verified Report request arrives. Best practices include designating a clear internal point of contact, mapping legal entities and acquisition history and confirming whether historical unclaimed property filing practices and property classifications align with current operations.

For companies that have never reported, early preparation provides the greatest flexibility and risk reduction.

Other states: Audit and self‑review notices are increasing

Although Delaware is the most active state in unclaimed property enforcement, it is not alone. Many states are increasing their focus on ensuring companies are current with their unclaimed property filings, resulting in a noticeable uptick in state outreach nationwide.

States are issuing reminder letters that outline filing obligations and directing them to conduct internal reviews. These notices can also take the form of self‑audit letters or compliance review requests, encouraging companies to validate their unclaimed property compliance without the state initiating a formal examination. More formal notices can include tight deadlines, document‑production requirements and may involve direction from third‑party firms engaged by the state. Additional states adopt similar approaches each year.

California provides a notable example. In late 2025, the California Controller’s Office mailed unclaimed property outreach letters to approximately 4,000 businesses, with additional waves planned in 2026. These 4,000 businesses were identified based in part on responses to unclaimed property questions recently added to California income tax forms.

The letters remind companies of their filing requirements and invite them to participate in the state’s voluntary compliance program. Actions taken by the letter recipients will be monitored by the state. California’s approach reflects a heightened compliance focus nationwide.

What to do when a notice arrives

If an unclaimed property notice is received, the greatest risk is treating the letter as routine correspondence. Receipt of a notice means the company has attracted the state’s attention, and non-compliance brings a high risk of audit.

The first step is to quickly and accurately identify the type of notice received and the actions required.

Questions to consider include:

• What type of notice is it (e.g., compliance reminder, VDA invitation, a Verified Report request or an audit notice)?
• What deadlines apply, and what level of response is required?
• What is the scope of the notice, and what entities, property types and years are covered?
• What are the consequences of non‑response?

Options: A practical decision framework

Companies should narrow their choices to a small set of strategic response paths. The right approach depends on factors such as the organization’s filing history, availability of records, acquisition footprint and risk tolerance.

Common response paths include:

• Enrolling in the state’s voluntary disclosure or amnesty program
• Completing the requested review (Verified Report, self-audit, etc.)
• Performing internal analysis to prepare for a potential audit
• Proactively engaging in internal risk assessment