Update and Secure Records During National Preparedness Month
As September is National Preparedness Month, it is a great time for individuals, organizations and businesses to review and update their emergency preparedness plan – or to develop one if they do not currently have a plan in place.
Having essential records and documents easily accessible can assist those affected by disasters in applying for relief from the IRS and other agencies, particularly when the federal government declares their location to be a major disaster area. Securing and duplicating tax and financial documents, creating lists of property and determining where to find information once a disaster occurs are all examples of steps individuals, organizations, and businesses can take to develop an emergency preparedness plan.
Original Documents
The first step should be securing original copies of important documents in waterproof containers in a secure location. Types of documents to secure in this manner include tax returns, birth certificates, deeds, titles and insurance policies.
It is also important to make copies of these documents that are stored outside of the potential disaster area. Individuals may want to consider allowing a family member or other trusted person to keep duplicate copies of the documents at a different location. Another option is to make digital copies. Original paper documents can be scanned and saved in a digital space such as a cloud-based storage application.
Inventories
Once a disaster happens, a detailed inventory of property and business contents can provide support for insurance claims or tax benefits. Individuals and businesses should take photos or videos to create a record of possessions and log relevant information such as year, make and model numbers, if applicable. The IRS offers disaster-loss workbooks to help individuals and businesses create an inventory of personal belongings or business equipment.
Record Reconstruction
Another step that may need to be taken when a disaster occurs is the reconstruction of records. This may be required for tax purposes, obtaining federal assistance or insurance reimbursement. Most financial institutions can provide statements and documents electronically, which can help in the record reconstruction process. The IRS website also offers tips on reconstructing records.
Employer Fiduciary Bonds
Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer against a possible provider default in the wake of a disaster.
As most employers already use the Electronic Federal Tax Payment System (EFTPS) to make their federal tax deposits and business tax payments, this is a convenient resource when a disaster displaces businesses and their employees. Payments can be made by phone or online, and tax payments can be tracked easily.
More Information and Resources
IRS Resources
- Publication 3067, IRS Disaster Assistance - Federally Declared Disaster Area
- Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property)
- Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook
- Publication 5307, Tax Reform: Basics for Individuals and Families
- Publication 583, Starting a Business and Keeping Records
- Publication 547, Casualties, Disasters, and Thefts
- Reconstructing Records After a Natural Disaster or Casualty Loss
- Tax Relief in Disaster Situations
Other Resources