Firm's launch underscores crafty accounting

Florida firms beware: the state government could start using some interesting auditing techniques to mine easy budget sources.

According to Josiah Osibodu and Kathy Moyer, the two accountants behind the recently launched Moyer & Osibodu Unclaimed Property Services, unclaimed checks are the target. The pair hopes to educate corporate clients and build a business out of the little-known accounting niche.

“Collecting unclaimed property is an easy way for states to increase revenues without raising taxes,” Osibodu says. Although Florida is not a big offender yet, he says it's a possibility in the future.

Unclaimed property generally refers to unclaimed payroll and vendor checks, however it extends to things such as stock certificates. All 50 states, Guam and Puerto Rico have tax laws that require this property be turned over to the state government until it can be given to the owner.

The problem: That rarely happens.

“The bigger the company, the more transactions they make, the higher probability of unclaimed property,” Moyer explains. And because the firm is expected to turn the property over with no guarantee of return for a period as long as five years, the accounting law acts as a tax.

States such as Delaware, where many public Gulf Coast companies are incorporated, require companies to file firms to show they have no unclaimed property. The state can order an audit if it thinks a company is too large to have nothing to file. Osibodu says states can ask for records dating back 25 years. “Delaware is very aggressive with its audits,” he says.

Osibodu and Moyer, who have specialized in this area of accounting for more than two decades, say they started the business to meet rising demand. Moyer says they will ensure clients are in compliance and avoid violations of the law.

Moyer says unclaimed property is rarely turned over to rightful owners because states are beginning to hire national accounting firms to complete audits. And electronic “property,” like a gift card, is difficult to track, she explains.

Says Osibodu: “It's like a tax without calling it one.”