As hurricane season begins, the IRS directs preparers and taxpayers to its disaster-planning primer designed to help preserve tax records before and after catastrophes.
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“Planning what to do in case of a disaster is an important part of being prepared,” the primer reads, offering steps to help taxpayers and businesses protect financial and tax records in case of disasters.
Among key points to recommend to clients:
• Use paperless recordkeeping: Encourage clients to receive bank statements and documents by e-mail, an “outstanding” way to secure financial records. Tax records such as W-2s, returns and other paper documents can also be scanned into an electronic format. Have clients back up electronic files and store them in a safe place -- and when choosing a place to keep records, convenience to a client’s home should not be a primary concern, as a disaster that strikes a home is also likely to affect other facilities nearby.
• Document valuables and business equipment: IRS disaster-loss workbooks for helping clients document valuables and equipment cover individuals and businesses. You might also advise clients to photograph or videotape the contents of homes and/or businesses, storing away from the geographic area at risk.
The IRS also recommends annual review of disaster plans and back-ups to communication systems with employees and family members.