The Delaware Secretary of State (SOS) is scheduled to issue a new round of voluntary disclosure agreement (VDA) program invitation letters on April 10, with a second round expected August 14.
While the letters might read like routine outreach, they actually function as a formal enforcement on-ramp: If a holder does not enroll timely (or if it affirmatively declines), the Delaware Department of Finance is highly likely to issue an unclaimed property audit notice 90 days after the SOS mails the invitation. Once the Department mails that notice, the holder becomes ineligible for the VDA program.
Delaware’s ‘VDA First, Audit Next’ Rule
Delaware law generally restricts the Department of Finance from commencing new unclaimed property audits unless the SOS has provided written notice offering the holder the opportunity to enter the VDA program. In other words, the invitation is not merely informational — it is often the required precursor to audit.
Once a holder receives the letter, it generally faces two paths:
- Enroll in the program and work through a structured, voluntary resolution process; or
- Do not enroll and be prepared for a Department of Finance audit and to be statutorily barred from entering the VDA program once the 90-day period expires.
Given the short response window and the audit backstop, the most effective strategy is to be ready before Delaware contacts you.
BDO Insight
- Designate a single internal owner and backup to receive notices and drive the response. VDA invitations are frequently overlooked or misrouted, and by the time they reach the right person, deadlines could be tight. If a deadline is missed, it might still be worth attempting enrollment if an audit notice has not yet been issued.
- Coordinate across all affected functions (finance, accounting, tax, legal, etc.) to confirm what records exist, what is retrievable, and whether there are gaps that could require estimation. Include third parties that issue funds on your behalf (payroll providers, gift card administrators, rebate and refund processors, etc.).
- Inventory prior compliance and exposure by reviewing historical filings (including in Delaware) and confirming which property types and holder systems could create liability in a VDA or audit.
- Perform a practical risk assessment and strengthen unclaimed property policies, procedures, and controls — not just for compliance, but also to reduce audit vulnerability and support defensible positions on exemptions, dormancy, and due diligence.
Please visit BDO’s State & Local Tax Services page for more information on how BDO can help.