Arizona’s Department of Revenue recently began issuing letters and emails to some unclaimed property holders regarding a new early compliance review pilot program for the 2026 unclaimed property reporting cycle. Although the Department describes the program as voluntary, the request signals a more proactive compliance posture and an apparent effort to obtain holder data well in advance of the state’s standard annual reporting deadline.
Under the program, the Department is asking participating holders to submit a preliminary NAUPA II report by July 4, 2026, approximately 120 days before the statutory filing deadline of November 1. The Department has indicated that the file should be submitted by email to [email protected] and, if email submission is not feasible, holders may contact [email protected] to arrange a secure delivery method.
The submission is described as a preliminary, data-only filing, and holders are instructed not to remit funds with their reports.
The Department has said that participation in the pilot does not replace or modify the holder’s existing annual compliance obligations, including due diligence mailing requirements and the requirement to file annual reports before the November 1 reporting deadline. It also has asked holders to provide customer service phone numbers so the state can direct apparent owners back to holders to facilitate claims before property is formally reported and remitted.
Based on available information, the initiative appears to have been rolled out without prior formal public announcement and, notably, without any clear statutory or regulatory framework authorizing a two-step reporting process in Arizona. Further, the timing of the request could present operational challenges because many holders are already engaged in due diligence mailings, tracking owner responses, managing multistate reporting obligations, and preparing for the broader fall reporting cycle. In that context, preparing a preliminary Arizona file months ahead of the statutory deadline might be difficult, especially if reportable populations remain subject to change before the final filing.
Key points for holders to note include:
- Participation is voluntary, although strongly encouraged by the Department.
- The Department has requested the preliminary NAUPA II be filed by July 4, 2026, via email, which could raise practical and data security considerations depending on the nature of the data.
- No payment or remittance should be submitted with the preliminary file.
- The pilot program does not alter the holder’s regular statutory compliance responsibilities, including due diligence and the annual filing deadline.
- Holders are also being asked to provide contact information to support potential owner outreach before remittance.
BDO Insight
- Arizona’s pilot program appears broadly similar to California’s pre-remittance reporting model, under which holders submit property information before funds are remitted. However, unlike California, Arizona does not appear to have enacted a statutory or regulatory framework expressly authorizing this type of two-step reporting process.
- Holders should carefully weigh whether participation provides a meaningful strategic benefit. On one hand, early submission might allow for greater visibility into potential reporting issues and help facilitate owner reunification efforts before the annual report is filed. On the other hand, the request could impose an additional administrative burden during an already active compliance period and require holders to share sensitive owner data earlier than otherwise required.
- The pilot program may ultimately serve as the foundation for broader implementation — or potentially more formalized or mandatory participation — in future reporting cycles. Holders that choose not to participate should still monitor developments closely because the program could reflect Arizona’s increasing interest in front-end compliance review and earlier holder engagement.
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