As we head into peak disaster season with National Wildfire Awareness Month in May and National Hurricane Preparedness Week running May 4 to 10, the IRS is reminding businesses and individuals that protecting financial and tax records should be a key part of any emergency preparedness plan. Natural disasters can strike without warning, and having a plan in place can make a real difference in how quickly individuals and organizations recover.
For HR teams and employees alike, this is a good time to review how important documents are stored, what emergency resources are available, and how to prepare for the possibility of unexpected disruptions. The IRS has released a number of tips to help safeguard records and ensure quicker recovery in the event of a disaster.
Protecting Documents and Data
Critical documents such as tax returns, Social Security cards, insurance records, property deeds, and employee records should be stored in waterproof, fire-resistant containers. Copies of these records should be kept in a secure secondary location, such as a safe deposit box or with a trusted contact in another region. Scanning documents and storing them on a secure flash drive or encrypted cloud storage adds another layer of protection.
Documenting Valuables
Employees and employers should keep visual records of valuable personal or business items. This can be as simple as taking photos or videos of high-value equipment or property. These records are helpful for insurance claims and tax deductions. The IRS provides free disaster loss workbooks (Publication 584 for individuals and 584-B for businesses) to help create organized inventories.
Rebuilding Records After a Disaster
If records are damaged or lost, they may need to be reconstructed for tax, insurance, or federal aid purposes. The IRS provides resources for rebuilding tax records at irs.gov, which can be a helpful first step in getting organized after an emergency.
Special Note for Employers
Businesses should verify that their payroll service providers have a fiduciary bond in place. This bond can protect the employer if the provider fails to make timely tax payments after a disaster. Choosing bonded providers adds an extra layer of security during unpredictable times.
IRS Disaster Relief
When FEMA issues a major disaster declaration, the IRS may automatically postpone filing and payment deadlines for affected individuals and businesses. No action is required for those in officially declared disaster zones because the IRS will apply relief automatically. For those outside of declared areas who are still affected, the IRS Disaster Hotline (866-562-5227) is available to help determine eligibility for relief.
Final Reminder
HR can play an important role in promoting emergency preparedness. Encouraging employees to protect their records, understand available resources, and plan ahead ensures greater resilience in the face of disaster.
For more information, visit IRS.gov: Preparing for a Disaster.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.