Hurricane season is looming on the horizon, but that is just one of the natural disasters that can affect a retirement plan and its sponsor. The IRS has issued some tips to aid in being ready for any eventuality.
Documents
Place original documents inside waterproof containers in a secure space. Kept duplicates of these documents with a trusted person outside the area of the taxpayer. Scanning documents for backup storage on electronic media such as a flash drive is another option that provides security and portability.
Document Valuables and Equipment
Current photos or videos of an employer’s valuables and equipment can help support claims for insurance or tax benefits after a disaster. All property should be recorded. IRS Publication 584 can help individuals and businesses compile lists of belongings or business equipment.
Fiduciary Bonds
Employers that contract with payroll service providers should ascertain whether the provider has a fiduciary bond in place.
Rebuilding documents
Reconstructing records after a disaster may be required for tax purposes, as well as for securing federal assistance or insurance reimbursement. The IRS webpage Reconstructing Records provides information.
IRS Assistance
The IRS notes that after the Federal Emergency Management Administration (FEMA) issues a disaster declaration, it may postpone certain tax-filing and tax-payment deadlines for taxpayers who either live in or have a business in an area where a disaster has been declared. The IRS also notes that it automatically identifies taxpayers that are located in areas where a disaster has been declared and applies filing and payment relief.
Those affected by a disaster can receive answers from the IRS to tax-related questions by calling 866-562-5227. Additional information and tips are available from the following documents:
- Publication 2194, https://www.irs.gov/pub/irs-pdf/p2194.pdf Disaster Resource Guide for Individuals and Businesses
- Publication 583, https://www.irs.gov/forms-pubs/about-publication-583 Starting a Business and Keeping Records
YouTube
The IRS also has prepared YouTube videos that provide relevant information.
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