Valuation and consulting for financial reporting, federal, state and local tax, investment and risk management purposes.Valuation Advisory
As we turn the page on the new year, several senior financial executives wonder whether they will ever be able to shake one or more unclaimed property audits that have stretched the company's resources for years. Unclaimed property audits do seem to drag on forever. The proliferation of third-party multi-state auditors has led to an exponential increase in the number of audits states initiate and has dramatically extended the duration of the audits. Many audits last at least 3-5 years, and in rare instances, some have lasted close to a decade. While often these audits do extend for valid reasons, one force driving this trend is that third-party auditors paid by the state are financially incented to prolong the audit period.
Compensation arrangements with third-party auditors are typically based on both hourly and contingent fee arrangements. Effectively, the auditors are paid the greater at pre-determined hourly rates or a percentage of the amounts ultimately collected by the states. Thus, it is a win-win arrangement for the auditors to devote extensive personnel and time in conducting the audit while holding out for the big prize at the end in terms of a contingent fee if it yields a higher result.
Despite these incentives, companies have specific legal and administrative remedies at their disposal to fairly and expediently conclude an audit. The key is knowing when and how to deploy these strategies to reach a favorable resolution.
Duff & Phelps' Unclaimed Property and Tax Risk Advisory team is highly experienced at bringing audits to a close. Frequently, we have been brought into audits that have been going on for years. For audits lasting years, a change on a Holder’s advocacy team is what is needed to break a logjam and end an audit. We can focus on key issues and execute a plan with company representatives and the states to reach final resolution.
Our team has deep relationships with state administrators and extensive experience dealing with employees at all the major third-party audit firms. Our knowledge of the states' and the auditors' tactics as well as internal and external demands and deadlines provides us the insight needed to push the right buttons to close an audit quickly.
Property tax, site selection, transfer pricing, sales and use tax and unclaimed property advisory.Tax Services
Assistance to identify, manage and implement controls relating to transaction taxes and unclaimed property.Unclaimed Property and Tax Risk Advisory
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