Tax Advice for People in Disaster Prone Areas

June 25, 2011 by  Filed under: Taxes 

Bad weather, including storms, tornadoes, earthquakes, and hurricanes, have affected many regions of America. The weather forecasters are also predicting more bad weather in different regions of the U.S. for the future. For people who live in these areas which are prone to bad weather, the IRS has provided helpful instructions on their website to assist them with information regarding better tax preparation. Some of the advice that they give to people in disaster areas are:

Review Emergency Plans

People living in disaster prone areas are advised to regularly review their emergency and back-up plans for their businesses or homes. An emergency plan helps you to cope better in case of a disaster. New employees should be well trained on emergency requirements, like what to do in case of a fire outbreak. Businesses should also have a plan for continuity in case of such disaster. This helps both individuals and businesses manage and recover from a disaster in a much faster way.

Back Up Tax Documentation

The IRS is also advising taxpayers to have proper back up for tax documentation. The IRS can audit a tax return of any taxpayer up to three years after the filing date. Therefore, every taxpayer is expected to keep tax documentation for at least 3 years from time of filing. For this reason, people who are living in disaster prone areas are advised to keep their tax records properly backed up. The best way of creating a back-up is scanning the tax support documentation and keeping it in electronic form in a back up CD or external hard disk. You can also save the electronic documentation in a remote location on the internet, such as in your web email account.

Pictures of Personal Belongings

Besides the tax documentation, people living in disaster prone areas are also advised to take clear pictures of their belongings. They should also make a list of their belongings and keep pictures of such possessions. The pictures and lists can be stored electronically in a remote location or with friends or family in another location in both paper and electronic form. The pictures will assist in claiming for the casualty loss tax credit, a credit that is given to taxpayers who have lost personal belongings in a disaster. The pictures will also help in cases of insurance claims.

Payroll Fiduciary Bond

A payroll fiduciary bond is a financial precaution that is taken by a payroll service provider to protect its clients from any losses that they may incur if the payroll service provider is unable to make payroll payments. Employers are advised to ensure that their payroll outsource company has the bond in place. This helps in disaster time, when the payroll service providers are limited from running payroll due to the impact of a disaster.

IRS Disaster Hotline

To assist any victims affected by a disaster, the IRS has set up a telephone line that is managed by IRS disaster specialist staff, trained to assist and process disaster situations. Therefore, if you need any form of tax help during or after a disaster, you can always call the IRS disaster number at 1-866-562-5227.

Rob L Daniel and partners of Limon Whitaker & Morgan, for years have helped businesses and individuals Nationwide, with their delinquent IRS & State tax problems. The firm is based in Los Angeles, California USA. http://www.limonwhitaker.com / Tel:888.321.6188

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