Safeguarding Tax Records for Hurricane Season

With the 2009 hurricane season now underway, the Internal Revenue Service encourages individuals and businesses to safeguard themselves by taking a few simple steps.

Create a Backup Set of Records Electronically

Taxpayers should keep a set of backup records in a safe place. The backup should be stored away from the original set.

Keeping a backup set of records –– including, for example, bank statements, tax returns, insurance policies home, etc. –– is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original records are provided only on paper, they can be scanned into an electronic format.

With documents in electronic form, taxpayers can download them to a backup storage device, like an external hard drive, or burn them to a CD or DVD.

Document Valuables

Another step a taxpayer can take to prepare for disaster is to photograph or videotape the contents of his or her home, especially items of higher value. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Check on Fiduciary Bonds

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

IRS Ready to Help

If disaster strikes, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Likewise, transcripts can be ordered using Form 4506-T, Request for Transcript of Tax Return. Returns or transcripts can also be ordered by calling 1-800-829-1040.

There is no fee for a transcript or tax return copy for a taxpayer located in a federal disaster area qualifying for individual assistance. Taxpayers should put the assigned Disaster Designation in red ink at the top of the request form.

Tax Relief in Disaster Situations
Frequently Asked Questions for Disaster Victims
Publication 552, Recordkeeping for Individuals
Publication 583, Starting a Business and Keeping Records

Document Protection For Hurricane Season

A few simple steps can help you keep your financial and tax records safe this hurricane season and potentially save you a big headache when it comes to filing your tax return next year.

Paperless Recordkeeping

Many people now receive bank statements and documents by e-mail or over the Web. Paper records such as W-2s, tax returns and other documents can be scanned and saved electronically.

With documents in electronic form, taxpayers can copy them onto a USB drive as a backup, which can be sent to a relative in another city for safe-keeping in case the taxpayer’s computer and paper files are destroyed.

Other options include copying files onto a CD or DVD. Many retail stores also sell computer software packages that can be used for recordkeeping.

Documenting Valuables

Another way you can prepare for disaster is to photograph or videotape the contents of your home, especially items of greater value. The IRS has a disaster loss workbook, Publication 584, which can help you compile a room-by-room list of belongings.

This can help you prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

Check on 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.

Update Emergency Plans

Review your emergency plan annually. Personal and business situations change over time as do preparedness needs. Individual taxpayers should make sure they are saving documents such as W-2s, home closing statements and insurance records. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

IRS Is Ready to Help

When disaster strikes, the IRS stands ready to help with valuable information that you can request if your tax records are destroyed.

Immediately after a casualty, you can request a copy of your return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return.

An information return or transcript can be ordered by calling 1-800-829-1040 or using Form 4506-T, Request for Transcript of Tax Return. There is no fee for a transcript. Transcripts are available for the current year and returns processed in the three prior years.

This Web site, IRS.gov, is also an indispensable source of information. The following pages and publications contain information that can help you be prepared when disaster strikes:

For Recent Grants of Relief, see Tax Relief in Disaster Situations
Reconstructing Your Records

Publication 552, Recordingkeeping for Individuals
Publication 583, Starting a Business and Keeping Records