IRS Offers Tips on Disaster Readiness (and They Don’t Mean a Criminal Investigation)

IRS

In the spirit of the hurricane season, the Internal Revenue Service (IRS) offers advice on preparing your business or personal enterprise in the event of an emergency.

 

By storm, fire, earthquake, and even volcano, many areas in the US are vulnerable to natural or man-made disaster.  While readiness usually means having a go-bag for everyone in your household (including pets), the IRS reminds us that business continuity is an important part of readiness planning.

 

Here are some tips provided by the IRS:

 

  • Create or update your emergency plan: The first step of ensuring your business stays in business after a disaster is an impact analysis done in advance of your emergency planning.  Evaluate your functions, personnel, and potential impacts after a disruptive event.  Know ahead of time how to protect your data.  Evaluate your resources and develop recovery strategies. A business continuity plan cannot be thrown together quickly.  If you have not started your plan, appoint a development team to do the job.  If you have a plan, update it with current personnel and best practices.

 

  • The importance of tax back-up: You already know the importance of careful record keeping in the event of an IRS audit or criminal tax investigation. The same goes if your office or financial records are damaged by flooding or other unexpected event. As experienced tax attorneys, we recommend you maintain redundant, secure copies of documents relative to your corporate and personal tax picture.  This includes tax returns, accounting documents or database, record of domestic and offshore tax holdings, statements or inventory of your financial accounts and other associated records.  Keep this and information on insurance policies and disaster-recovery plans securely stored in the Cloud and off-premises.

 

  • Support your employees: Go the extra mile by ensuring your employees are knowledgeable about disaster readiness if you live in an area prone to seasonal flooding or storm.  Local CERT groups may provide outreach programming to help you prepare for disaster at home and in your place of business. Understand chain of command and consider emergency assistance to employees who are hit hard by an event, or may need evacuation.

 

  • Residential or commercial valuables: Keep up to date images and video of your residential and commercial assets.  There are apps and other tools available to help you create an inventory of your possessions to help you submit and prove any insurance claim you need to make.

 

  • Payroll fiduciary bonds: The IRS notes commercial enterprise should ensure their payroll service providers are bonded in the event of default during a disaster.

 

The degree to which you and your business are ready improves your resilience in the face of an unknown challenge.  Business continuity planning helps keep lights on whether you are hit by flood or ransomware.

 

In case of loss and if you need access to your tax returns, you can order a free transcript online or by calling the IRS at (800) 829-1040.  Get ahead of any season by making sure you are ready for whatever comes your way.

 

Strategic legal solutions for complex tax defense challenges

 

The law offices of Robert J. Fedor, Esq., LLC serve clients on a global and local level from our offices in Chicago and Cleveland.  From tax litigation to offshore tax issues, we provide highly skilled, resourceful legal representation. Call 800-579-0997 or contact us today.

 

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