1/11/12

The State Bar has contacted the Michigan Department of Treasury about a form letter received by an unknown number of Michigan lawyers and perhaps others in mid-December pertaining to the Uniform Unclaimed Property Act that gives a January 31, 2012, response deadline. Members who have received this letter should review its contents carefully before executing the accompanying Michigan Unclaimed Property Voluntary Disclosure Agreement.

Although the Treasury Department's form letter references a "voluntary" disclosure program, the content of the letter directs the recipient either to report about and remit unclaimed property or to file a form "attesting to compliance" with the act, by affirmatively stating that the reporting entity has no unclaimed property. No provision of the Uniform Unclaimed Property Act that requires an annual reporting of a lack of unclaimed property has been identified. View a copy of the form letter.

Execution of the accompanying "Michigan Unclaimed Property Voluntary Disclosure Agreement" commits the signatory (identified as a "Holder" in the agreement) to annually thereafter file attestations of compliance in any year where there is no unclaimed property to report and to "accurately complete and file" unclaimed property reports and remit payments for the current and the previous four reporting years. Holders also agree that, "An unclaimed property examination may cover up to the last ten reportable years and result in an assessment of penalties and interest." Although holders of unclaimed property are required to maintain records of the names and last known addresses of owners for ten years after the property becomes reportable, there is no specific statutory authority for a ten-year look back in the provisions discussing examinations. Presumably, one purpose of executing the Agreement is to lay a foundation for seeking an examination when a report is not filed and to facilitate ten-year examinations. In exchange for the commitments made by Holders, the Treasury Department agrees to hold off audits until after July 1, 2012, and to waive penalties and interest for property turned over with the filing of the form.

Because of a concern that recipients of the letter could conclude—perhaps mistakenly—that execution of the agreement is mandated by law, State Bar Executive Director Janet Welch sent a letter on January 3, 2012, to Richard J. Darling, Deputy Director of Financial and Administrative Services at the State of Michigan Department of Treasury, the official who signed the form letter. View the letter. To date, no response from the Treasury Department has been received.