Our question is to what extent do the states have the authoritiy to contract with or outsource an abandoned and unclaimed property audit to a third-party, and how objective will auditor's be who have a vested interest in the outcome of the examination considering the fact that the more they find the more they make?
Tax Professional Answers
Further, you are very perceptive in your concern for objectivity in the examination when the auditors have a vested interest in the audit results. Depending on what third-party firm will be auditing you, and I can probably guess who they are if Delaware is involved, the audit will not be undertaken from an objective perspective but instead, becomes merely an exercise in seeing how much money can be extorted out of your company. Depending on the size of your company, quality of records and years in existence, don't be surprised to get initial exposure amounts in the multi-million dollar neighborhood.
Having represented more companies than I can remember, the amounts claimed to be owed by some of the third-party audit firms are wildely inflated by huge multiples. The best advice I could profer would be not to try to go it alone but instead, consider retaining a competent advocate to guide you and your company through the process. I can't tell you how many companies for the sake of saving some money try to undertake the audit defense on their own. Not wise! the few dollars you spend up front can save you exponentially down the road.
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