Picking Up the Pieces After a Disaster


Image(s) included
Post a comment
Salvaging the Ruins Picking up the Pieces After a Disaster

Planning what to do in case of a disaster is an important part of being prepared. The IRS encourages taxpayers to safeguard their records. Some simple steps can help taxpayers and businesses protect financial and tax records.

Security in Electronic Record-keeping

Many people receive bank statements and documents electronically. This method allows for easy backup to ensure secure record keeping. Files can be copied to a portable electronic storage device, such as a flash drive, or onto a CD or DVD.

In addition, you may scan your paper documents (W-2s, tax returns and other records) to create electronic files for safekeeping.

Be sure to store these backup files in a safe location, apart from your business, in case your normal backup systems are destroyed. Convenience to your home should not be your primary concern. Remember, a disaster that strikes your home may also affect other facilities nearby, making quick retrieval of your records difficult and even impossible.

Document Valuables and Equipment

Publications 584, Casualty, Disaster, and Theft Loss Workbook, and 584-B, Business Casualty, Disaster, and Theft Loss Workbook, can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and document the market value of items for insurance and casualty loss claims. You can also photograph or video the contents of your home and/or business, especially items of great value.

Verify Fiduciary Bonds

Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider during a disaster.

Continuity of Operations Planning

How quickly your company can get back to business after a disaster strikes often depends on the emergency planning you do today. Plan now to improve your company’s ability to survive and recover, and then review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees, or changes occur in how your company functions, you should update your plans and inform your employees.

Here are preparedness strategies:

  • Learn about various hazards and emergencies and how to respond to each.

  • Keep apprised of community warning systems and evacuation routes.

  • Identify where you and your employees may seek shelter from all types of hazards.

  • Determine how to communicate with employees and customers in the event of emergency.

  • Develop and document an emergency plan.

  • Collect and assemble a disaster supply kit, including a portable generator.

  • Include required information from community and school plans.

  • Use cell phones, walkie-talkies, or other nonelectrical communication devices as backups.

  • Backup computer data systems regularly.

  • Practice and maintain your plan.

Count on the IRS

In the event of a disaster, the IRS stands ready to help you if your records are destroyed. You can request a copy (for a fee) of a tax return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return.

If you need only the information from your return, you can order a free transcript by calling 800-829-1040 or using Form 4506-T, Request for Transcript of Tax Return.

Special Disaster Provisions

Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the president declares their location to be a major disaster area. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes.

Related content

Last updated: 08/31/2017 - 4:04pm