Abandoned Property Annual Report – Due November 1st

For decades, the Massachusetts Abandoned Property Law has required all businesses to review their records each year to determine whether they are in possession of any unclaimed funds or any other property that belongs to someone else. If they are, that property must be turned over to the state; it does not become the property of the business.

Any debt or obligation which has gone unpaid or security that has remained undelivered for three or more years, as of the preceding June 30, must be reported and paid to the Commonwealth of Massachusetts Treasury Department, Unclaimed Property Division. An annual report, Form AP-1, is required to be filed by November 1, even if no abandoned property is held.
 
Businesses that fail to comply with the law, either by failing to file a report or by reporting improperly, are subject to audit, assessment, and interest at 12% per year on the amount not reported or delivered as required. In addition, the Unclaimed Property Division can assess you for the cost of the examination! Since compliance is not only required but also generally simple, annual filing is strongly recommended.

The process of reporting and remitting abandoned property to the Commonwealth can be broken down into just a few simple steps. Here they are:

• Identify the abandoned property to be remitted. This could be savings accounts, checking accounts, money orders, wages or payroll funds or any other type of property that has been inactive or outstanding for three years as of June 30 of the reporting year. Life insurers, who have a reporting deadline of May 1, should report property that was three years old as of December 31 of the previous year. Although most kinds of property have a dormancy period of three years, there are some exceptions, so make sure to consult the complete listing of property types and their dormancy periods, which can be found at: http://abpweb.tre.state.ma.us/abp/_printableForms/AbanPropBook.pdf.

• Try to locate the owners of the property. In accordance with Massachusetts General Law chapter 200A § 7A, a due diligence notice must be sent by first-class mail to the last known address of every owner with property valued at $100 or more at least 60 days prior to the filing of reports with the Abandoned Property Division. Due diligence letters sent to owners of property presumed abandoned pursuant to Massachusetts General Law chapter 200A shall include, but not be limited to, the following information:

- a description of the property, including account number, policy number or other identifying information
- a statement explaining that state law requires holders of abandoned property to report and remit such property; and,
- the date that the property will be reported to the Abandoned Property Division if there is no owner contact.

• Send the report package (make sure to use the checklist) and funds to the State Treasurer’s Office. Life insurers must file annually by May 1. All other companies must file annually by November 1. Checks should be made payable to The Commonwealth of Massachusetts.

 
REPORTING INSTRUCTIONS

Electronic Holder Information
An electronic version of this reporting booklet is now available online. If you would like to receive mail notification when this information is updated annually instead of receiving a paper copy, you may request this service by visiting the state web site. Simply submit your company’s Federal Tax ID number and Holder ID Number to sign up. Your Holder ID Number can be found above your company’s name on the mailing label of the abandoned property booklet.
 
Any report for at least one owner must be filed electronically on either diskette or CD or FTP. Paper reports will not be accepted. The State encourages holders to give owner detail on all remittances regardless of amount.  Negative reports need not be accompanied by a diskette. The NAUPA approved software is easy to use. The instructions can be found at: http://abpweb.tre.state.ma.us/abp/abp_holderinfo.htm or call our office at (617) 367-3900 and ask for Abandoned Property Reporting to have a diskette package mailed to you.    
 
REPORTING FOR OTHER STATES
 
Filing One Report
If you are a business located in the Commonwealth of Massachusetts , you may file one abandoned property report with the Massachusetts Treasury Department even if you are holding the property of owners who reside in different states. The Commonwealth of Massachusetts State Treasurer will forward the names of out-of-state owners and funds to the appropriate states. Massachusetts has a reciprocal agreement with the states listed at left.
 
Here’s how…

• Use Massachusetts ’ AP-1 and software.
• Use the abandonment period required by the state of owner’s last address.
• Group owners by state of last known address.
• Notify the other states of your intent to report to Massachusetts .

Aggregate Reporting
An aggregate report may be filed for intangible property with a value of less than $100, which is sent to the State Treasurer in a “lump sum” pursuant to M.G.L. c.200A § 7(b)(3). When remitting property with a dollar value of less than $100, aggregate reporting is an option for the holder. The Abandoned Property Division, however, advises including owner detail on every property remitted and submitting as little aggregate reporting as possible. There are two main reasons for this advice:

• It is easier for the Division to return money to owners when the remittances contain relevant information (e.g., name, check number).
• It is easier on the holder in the future because aggregate claim forms have to be certified by the holder before they are paid. This requirement places the burden of record-keeping on the holder who uses aggregate property reporting. Thus, while aggregate reporting is allowed, it is not recommended.

 
NEGATIVE REPORTING
 
All businesses in the Commonwealth should file an abandoned property report. If a business is not holding any abandoned property, as defined on page 2, it should file a negative report affirming that the holder has no abandoned property to report. A negative report does not need to be filed on a diskette. It may be filed on an AP-1 form or on a letter that bears the company letterhead. If filing by letter, the report must be signed by an officer of the corporation. The signature on the letter submitted must be affirmed by a notary public. Be sure to include the company’s federal tax identification number (F.E.I.N.) as well as a current address and contact person.
  
Mail your report package to:
Commonwealth of Massachusetts
Department of the State Treasurer
Abandoned Property Division
P.O. Box 414478
Boston, MA 02241 -4478

 
DELIVERY OF FUNDS AND SECURITIES TO THE COMMONWEALTH OF MASSACHUSETTS
 
The Commonwealth of Massachusetts, Abandoned Property Division requires all holders remitting abandoned property $10,000.00 or greater to remit by Electronic Funds Transfer (EFT). In order to remit by EFT, holders are required to complete and return the Authorization Agreement for Electronic Funds Transfer annually to the Abandoned Property Division for Approval. Holders remitting amounts less than $10,000.00 are also encouraged to use the EFT method. Agreement forms can be downloaded from their web site: http://abpweb.tre.state.ma.us/abp/abp_formsLibrary.htm and select print form or call 617-367-3900 to have one mailed out. If you need assistance in preparing this form, please contact us.

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