anonymous

IRS Outlines Guidance During Natural Disasters and Emergencies

Safeguard your data and implement preparedness plans during National Hurricane Preparedness Week and National Wildfire Awareness Month.

05/24/2023 3:10 P.M.

3 minute read

As National Hurricane Preparedness Week and National Wildfire Awareness Month come into focus, it’s crucial to recognize the importance of protecting your tax and financial information as part of a comprehensive emergency preparedness plan.

So far in 2023, the Federal Emergency Management Agency (FEMA) has declared disasters for mudslides, landslides, severe storms, tornadoes and more. Disasters can have a profound and lasting impact on individuals, organizations and businesses, making year-round preparation essential.

In recognition of this period, the Internal Revenue Service has provided valuable tips to help taxpayers safeguard their personal financial and tax information, ensuring a complete preparedness plan.

Keep Key Documents Safe and Make Extra Copies

To protect crucial documents such as tax returns, Social Security cards, birth certificates and deeds, the IRS recommends placing them inside a waterproof container stored in a secure location. Additionally, creating copies of these vital documents and storing them in a secondary location, such as a safe deposit box or with a trusted person residing in a different area, adds an extra layer of security. Scanning important documents and saving them on a flash drive allows for easy portability.

Create a Record of Valuables and Equipment

To support insurance claims or tax benefits in the aftermath of a disaster, it’s important to record all property, especially high-value items. A simple list accompanied by current photos or videos can provide valuable evidence. The IRS disaster loss workbooks, found in Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) and Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook, can assist individuals and businesses in making comprehensive lists of belongings or business equipment.

Reconstructing Records

If disaster strikes, it may become necessary to reconstruct or replace records for tax purposes, claiming federal assistance or obtaining insurance reimbursement. Accurately estimating the loss is crucial, as it impacts the amount of available loan and grant money. Taxpayers who have lost some or all of their records during a disaster should visit the IRS’s Reconstructing Records webpage as a first step toward recovery.

Employers Should Check Fiduciary Bonds

Employers who rely on payroll service providers should ensure that their provider has a fiduciary bond in place. This bond can protect the employer in case of default by the payroll service provider. It is essential for employers to carefully choose their payroll service providers to mitigate potential risks.

IRS Provides Tax Relief After a Disaster

Following a major disaster or emergency measures declaration by FEMA, the IRS may grant certain tax filing and payment deadline extensions for taxpayers residing or conducting business in affected counties. For a detailed list of states and counties eligible for relief, taxpayers can refer to the IRS disaster relief page. It is worth noting that taxpayers located in covered disaster areas are automatically identified by the IRS for filing and payment relief. In case of any inquiries related to tax matters during a disaster, individuals can contact the IRS at (866) 562-5227 to speak with a specialist trained in handling such issues.

Seeking Disaster Tax Relief and Exploring Options

Protecting tax and financial information is an essential component of any comprehensive emergency preparedness plan. Using these tips, business owners can evaluate their readiness and take necessary steps to safeguard their crucial documents, create comprehensive records of valuables, and understand the options available for reconstructing lost records.

Visit Ready.gov and IRS.gov for additional disaster information.

Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

Advertisement

Base

Advertisement

Training Zone
One moment please...

Share Profile

This site uses cookies. By continuing to use our site, you are agreeing to our use of cookies. Review our Privacy Policy for more information. You may change your preferences on how cookies are stored by reviewing the settings on your browser.

The content on this site is presented for educational, general reference, and informational purposes only; is not intended to serve as legal or other advice; is not intended to be a full and exhaustive explanation of the law in any area; and should not replace the advice of your own legal counsel. By continuing to use our site, you are agreeing to the legal disclaimers in our Terms of Use. Review our Terms of Use for more information.

Friendly Reminder

Get continued access to ACA International’s wide array of resources, which can help you become more profitable, compliant and successful.

Renew your membership today to take advantage of tools you won’t find anywhere else:

  • Discounts on seminars, products, services and events
  • Resources to strengthen your compliance department
  • Industry-specific risk management products and services
  • Participation in ACA’s online community, The Hub
    Members-only website content
  • Professional development and training opportunities, and so much more!

If you have completed your renewal, please disregard this reminder.