With severe weather season upon us, the Internal Revenue Service is offering advice to help everyone minimize storm and natural disaster impact. Businesses are encouraged to follow these tips in preparing for such events:
- Use electronic records. Businesses may have access to bank and other financial statements online. If so, your statements are already securely stored there. Consider also keeping an additional set of records electronically. One way is to scan tax records and insurance policies into an electronic format. Businesses may want to download important records to an external hard drive, USB flash drive or burn them onto CDs or DVDs. Be sure to keep duplicates of records in a safe place by storing them in a waterproof container away from the originals. If a disaster strikes your business, it may also affect a wide area and make it impossible to retrieve records stored in the storm-damaged area.
- Document valuables. Take time and date-stamped photos or videos of the contents of your business. These visual records can help prove the value of lost items. They can help with insurance claims or casualty loss deductions on a tax return. Businesses should also store these photos and videos in a safe place.
- Contact the IRS for help. Businesses that fall victim to a disaster may call the IRS disaster hotline at 866-562-5227 for special help with disaster-related tax issues.
- Get copies of prior year tax records. If a copy of your business tax return is needed, file IRS Form 4506 – Request for Copy of Tax Return. Each copy costs $50. However, the IRS is expected to waive this fee if a business is a victim of a federally-declared disaster. For information showing most line items from a tax return, call 1-800-908-9946 and request a free transcript. Alternatively, businesses may file IRS Form 4506T-EZ – Short Form Request for Individual Tax Return Transcript or IRS Form 4506-T – Request for Transcript of Tax Return.
The IRS offers many resources to help employers plan for and recover from disasters, including IRS Publication 584-B – Business Casualty, Disaster and Theft Loss Workbook and web pages devoted to preparing for a disaster and tax relief in disaster situations.
For individualized guidance, contact your Professional Insurance Programs benefits team at 800-637-4676.
Source: HR360, Inc.