Wisconsin Legislature Initiates Unclaimed Property Voluntary Disclosure Agreements

02.26.22

When a party (a holder) is holding property presumed to be abandoned (that is, unclaimed property), the holder must file a report with the Wisconsin Department of Revenue (DOR) summarizing the held property. See Wis. Stats. § 177.0401 et seq. Failure to file may lead to various financial penalties. Therefore, it is in a holder’s best interest to promptly file an appropriate report.

If a holder forgets to file a report, is there any way to avoid the penalties? Previously, no. However, the Wisconsin Legislature recently provided a means to potentially avoid liability by passing 2021 Wis. Act 87, which amends Wisconsin Chapter 177 (the Uniform Unclaimed Property Act).

Act 87 provides a means by which a holder of presumed-abandoned property can avoid the financial penalties associated with failing to file or improperly filing a required report. To benefit from Act 87, the holder must enter into a voluntary agreement with the DOR between February 1, 2022 and February 28, 2023 and further demonstrate that they:

1. Failed to file a report or failed to include all relevant property in a filed report.
2. Are not under examination or investigation by the DOR.
3. Have not received notice from the DOR of an impending investigation.
4. Have not received any notices of assessment under Chapter 177, Subchapter X or XI.
5. Are not subject to civil or criminal prosecution under Chapter 177.
6. Agree to report and deliver, if possible, any identified property within sixty days of executing the agreement.
7. Agree to perform all duties under Wis. Stats. 177.0501 within 30 days of executing the agreement.
8. Agree to prospective compliance with Chapter 177.
9. Agree to waive all appeal rights under Chapter 177 for the applicable time periods.

If an agreement is executed between the holder and the DOR, the holder is relieved of any and all liability related to the property identified in the agreement for the five reporting periods immediately preceding the agreement’s filing date. In addition, the holder must maintain all records relating to the identified property.

A holder entering into an agreement with the DOR should further understand that the DOR may render a prior agreement null and void if at least one of the following applies:

1. The holder committed fraud or intentionally misrepresented information to the DOR.
2. The DOR determines that the prior-reported property is less than 75% of the value of reportable property for the relevant time period.
3. The holder fails to remain in compliance with Chapter 177 for at least the four reporting periods following the final reporting period covered by the agreement.

Practically speaking, entering into an agreement with the DOR for any presumed-abandoned property that has either been improperly reported or that has not been reported at all is a viable means of avoiding potential financial liability and directing any subject property to its rightful owners.

• Real Estate/Leases