view through car windshield on stormy road and rain

Protect Your Organization This Hurricane Season

Tips on Preparing Your Business for a Natural Disaster

With the start of peak Atlantic hurricane season this month comes the risk of losing essential business records, files, and other materials to floods or damaging winds.

To reduce your damage costs and hasten your return to normal business operations, follow the following tips from the Federal Emergency Management Agency (FEMA):

  1. Confirm your insurance:  Review the details of your flood and other hazard insurance policies, paying close attention to which items are covered and under what conditions. If you have questions, contact your insurance agent.
  2. Back up essential files:  Regularly back up important electronic files (such as billing and payroll records and customer lists), and keep backup copies in a secure, off-site location. Copies of important papers (business plans, legal documents, etc.) should also be stored securely off-site.
  3. Consider the location of equipment susceptible to damage:  Raise computers above flood level, move heavy objects to low shelves, and secure any equipment that could move or fall during a natural disaster.
  4. Take inventory:  For insurance and tax purposes, maintain written and photographic inventories of all important materials and equipment, and store the inventory in a safety deposit box or other secure location.
  5. Perform regular building maintenance and repairs:  Periodically evaluate your building to make sure wind and water are not able to penetrate it.

Develop an emergency action plan to protect your employees and business during a disaster in advance to better prepare your business.

lightning storm with purple sky over city

IRS Offers Tips To Help Businesses Prepare For Natural Disasters

Using Electronic Records and Documenting Valuables Encouraged

With hurricane season underway, the IRS is offering advice to those impacted by storms and other natural disasters. The following tips may help businesses prepare for such events:

  • Use electronic records. Businesses may have access to bank and other financial statements online. If so, their statements are already securely stored there. They can also keep an additional set of records electronically. One way is to scan tax records and insurance policies onto an electronic format. Businesses may want to download important records to an external hard drive, USB flash drive or burn them onto CDs or DVDs. Be sure to keep duplicates of records in a safe place. For example, store them in a waterproof container away from the originals. If a disaster strikes your business, it may also affect a wide area. If that happens, it may be impossible to retrieve the records that are stored in that area.
  • Document valuables. Take time and date stamped photos or videos of the contents of your business. These visual records can help prove the value of lost items. They may help with insurance claims or casualty loss deductions on a tax return. Businesses should also store these in a safe place.
  • Contact the IRS for help. Businesses that fall victim to a disaster may call the IRS disaster hotline at 866-562-5227 for special help with disaster-related tax issues.
  • Get copies of prior year tax records. If a business needs a copy of its tax return, it should file IRS Form 4506Request for Copy of Tax Return. The usual fee per copy is $50. However, the IRS is expected to waive this fee if a business is a victim of a federally declared disaster. For information that shows most line items from a tax return, call 1-800-908-9946 to request a free transcript. Alternatively, businesses may file IRS Form 4506T-EZShort Form Request for Individual Tax Return Transcript, or IRS Form 4506-T, Request for Transcript of Tax Return.

The IRS offers many resources to help employers plan for and recover from disasters, including IRS Publication 584-BBusiness Casualty, Disaster, and Theft Loss Workbook, and webpages devoted to preparing for a disaster and tax relief in disaster situations.