California to allow unclaimed property voluntary compliance program

TAX ALERT | September 16, 2022

Authored by RSM US LLP

On Sept. 13, 2022, California Gov. Gavin Newsom signed into law Assembly Bill 2280. Among other changes, the legislation authorizes the state’s Controller to create a voluntary disclosure program for unclaimed property. 

The voluntary compliance program

California typically imposes a 12% interest rate on unclaimed property that is not timely reported, paid, or delivered to the state. Acknowledged by the legislature in the bill, this interest rate presents a significant deterrent to reporting past-due unclaimed property for holders who may have either underreported or never filed unclaimed property reports to the state. There has not been an opportunity for holders to come into compliance with California’s unclaimed property reporting requirements, without interest assessments, since the last time California offered an unclaimed property amnesty program in 2001-2002. The Voluntary Compliance Program (VCP) described in the bill would allow eligible holders to report unclaimed property to the state and receive a waiver of associated interest, removing some of the existing barriers to becoming compliant with the state’s unclaimed property laws. 

Participation in the program will be up to the discretion of the Controller; however, there are several instances in which a property holder would be excluded from eligibility for the VCP. Eligible property holders must not:

  1. be under audit by the state related to unclaimed property,
  2. be the subject of civil or criminal prosecution related to non-compliance with state unclaimed property laws,
  3. have an unclaimed property interest assessment within the last five years that remains unpaid at the time of application, or 
  4. have received a waiver of assessed interest within the last five years, although an exception may be granted if the holder has unclaimed property to report as a result of a merger or acquisition. 

Property holders who have historically filed reports with the state but have failed to properly report a specific category(ies) of property and/or the accurate amount of unclaimed property past due for escheatment are eligible to participate in the VCP, provided they otherwise meet the eligibility criteria noted above. 

After acceptance into the VCP at the discretion of the Controller, property holders must:

  • Enroll and participate in an unclaimed property education program within three months of the date of acceptance into the VCP
  • Review their books and records for the past 10 years to identify unclaimed property 
  • Make reasonable efforts to notify owners of reportable property, as required by law, at least 30 days prior to the filing of an unclaimed property report with the state
  • File an unclaimed property report within six months of enrollment in the VCP, unless an extension has been explicitly granted
  • Submit an updated report no sooner than seven months and no later than seven months and 15 days from the filing of the initial report and deliver all escheated property to the state

Assuming all requirements listed above are met by the property holder, the Controller is authorized to waive the 12% interest which would normally be imposed. The Controller is also authorized to create guidelines and forms in order to administer the VCP. 

Importantly, while the legislation itself is effective 90 days after enactment, the new program will not be operative until an appropriation is made for the program in the annual budget. Accordingly, holders can likely anticipate the program sometime in 2023. However, preparation for the program and evaluating unclaimed property exposure should begin now. Holders that have not reported, have underreported and/or believe they have California unclaimed property exposure should consider that while the VCP has been authorized, a program has not yet been established, potentially impacting some holders’ compliance planning.   


The authorization of the VCP comes at a moment where holders face increased scrutiny related to unclaimed property compliance. While the California Controller is responsible for the administration of the state’s unclaimed property regime, the legislature recently authorized the California Franchise Tax Board (FTB) to collect information on unclaimed property compliance through required disclosures on income/franchise business tax returns. Tax year 2021 income/franchise business tax forms for all entity types have been updated to include questions about whether a taxpayer has historically filed unclaimed property reports, the date of the most recent report and the amount remitted with the most recent filing. The FTB will share this information annually with the state Controller’s office, and the Controller may use this information to identify holders who are not in compliance with the state’s unclaimed property laws. 

With a typical audit lookback period of 10 years plus the applicable dormancy period, and a 12% interest rate, unclaimed property non-compliance in California presents a significant risk for affected property holders. The authorization for this new program represents the first opportunity in 20 years for holders to come into compliance voluntarily without the imposition of interest on all past-due property. The program will allow eligible property holders to achieve compliance and avoid substantial interest assessments. 

Property holders who are currently non-compliant in California should carefully consider enrollment in a VCP as well as consider how to address any upcoming income tax form filing deadlines and unclaimed property-related disclosures. Please consult your unclaimed property adviser If you have questions related to California unclaimed property in general or the authorization of the VCP. 

Let's Talk!

Call us at +1 213.873.1700, email us at or fill out the form below and we'll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

This article was written by Jennifer Fine, Anna Cronic, Catherine Del Re, Yudit Freda and originally appeared on 2022-09-16.
2022 RSM US LLP. All rights reserved.

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

​Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.

For more information on how ​Vasquez & Company LLP can assist you, please call +1 213.873.1700.

Subscribe to receive important updates from our Insights and Resources.

  • Should be Empty: