Pushing Beyond the Limit: Examining the Scope of Subpoenas Issued During Unclaimed Property Audits

July 28, 2020 By Josh Labat, Matt Hedstrom, Kendall Houghton, Michael Giovannini, Kathleen Cornett, Maryann Luongo and Ethan Millar

A Delaware court quashed a subpoena aimed at an unclaimed property holder, but the victory may be short-lived. Our Unclaimed Property Team explores the latest court decision addressing a subpoena for records dating back to the 1990s.

The subpoena asked for every check issued from 27 accounts over 20 years, including cleared and voided checks and checks issued to payees in other states
The court found the subpoena too expansive and unreasonable
The third-party auditor’s incentives and motives were called into question

Read the full advisory here.

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About Josh Labat

Joshua A. Labat is an associate based in the New York office. Josh focuses his practice on complex state and local tax controversy, administrative proceedings, audits, litigation, and unclaimed property matters.

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About Matt Hedstrom

Matt offers clients both technical and practical advice in navigating complex state and local tax issues. His breadth of experience handling multistate tax planning, controversies and unclaimed property matters has established Matt as a skilled tactician providing nuanced counsel on an array of state and local tax matters.

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About Kendall Houghton

Ms. Houghton is a nationally recognized expert whose practice focuses on state and local tax planning, tax controversies and unclaimed property/escheat matters. She leads the Alston & Bird SALT practice and serves on the firm’s Partners’ Committee.

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About Michael Giovannini

Michael is a senior associate in the firm's State & Local Tax Group, focusing his practice on advising clients and providing practical planning services with respect to various state and local tax and unclaimed property issues.

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About Kathleen Cornett

Kathleen Cornett is an associate on the Alston & Bird State & Local Tax Team. She focuses her practice on federal, state, and local tax controversy matters, as well as unclaimed property issues.

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About Maryann Luongo

Maryann H. Luongo serves as counsel in the firm’s State & Local Tax Group. She focuses her practice on state and local tax planning and controversy, and addresses clients’ multistate tax issues, including state income tax apportionment, tax base, business/nonbusiness income determinations, telecommunications and sales/use tax nexus, sourcing and taxability issues.

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About Ethan Millar

Ethan Millar is co-leader of Alston & Bird’s Unclaimed Property Team and focuses his practice on unclaimed property/escheat and state and local taxation (SALT). He has represented hundreds of companies in unclaimed property and SALT matters spanning virtually every major industry, including retail, financial services, manufacturing, insurance, telecommunications, health care, real estate, and entertainment.

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