IRS: Make sure Finance records are secure for National Preparedness Month

National Preparedness Month is every September, and IRS is reminding employers to boost their disaster preparedness and ensure their important Finance records are protected.

Between hurricanes, wildfires and other severe weather conditions, it’s key for companies to regularly review and update their emergency preparedness plans. Losing key documents due to a disaster can make matters worse during the recovery process.

Steps to prepare for disaster

Here are some areas employers should watch closely when they’re evaluating their disaster preparedness, IRS said.

1. Ensure storage is secure. If you have on-site paper documents relating to tax filing, consider storing them in waterproof containers inside a secure space. Even better: Digitize your records to reduce the chance they’ll be damaged beyond repair
2. Keep backup copies. Your original tax documents should be backed up and stored securely. Whether they’re extra physical copies off site or extra digital copies saved to the cloud, having spare copies of documents is extra preparation for disaster.
3. Regularly review your assets. Does your team maintain a detailed list of your property and inventory? This info is beneficial when making insurance claims or applying for tax benefits. The list should include how much property you have, a brief description of the items and other info such as year, make and model numbers of equipment (if applicable). It’s also helpful to take photos or videos of your assets and inventory as further evidence.
4. Be prepared to make payroll tax payments. Companies that work with payroll service providers need to check if the provider has a fiduciary bond in place that’ll protect them against provider default in case disaster strikes. It’s also important to check the data in the Electronic Federal Tax Payment System (EFTPS) to make sure that deposits are still being made on your company’s behalf.

Handling issues with Finance records

On the off chance that your important tax records are damaged or destroyed after a disaster, most banks and other financial institutions can help you reconstruct business records by providing the Finance team with statements and documents electronically.

To give you more time to reconstruct records, IRS typically extends tax relief to businesses located in federally declared disaster areas. Relief may also be available for those outside the disaster area whose operations were significantly impacted by the disaster. Businesses who may be eligible can call the IRS disaster hotline at 866-562-5227.