Finance News & Insights

4 steps IRS wants you to take for hurricane season

Hurricane season has officially begun in the Atlantic. And look who’s weighing in on how your business needs to prepare itself: the Taxman.

IRS just issued guidance for both businesses and individuals on some best practices to protect themselves in the event of weather-related disasters.

And seeing as experts are predicting at least three major storms to impact the U.S. this go-around, it’s worth paying close attention.

Plus, considering that IRS is giving you fair warning, you can bet it’s not going to accept any excuses for not doing all you can to keep your sensitive financial information safe.

No time to waste – cover all these bases

IR-2013-56(released 5/29/13) outlines the four steps the Service expects you to have taken to safeguard your tax data.How many have you covered already? There’s no time to lose:

  1. Create backup electronic records.Whether you’re predominantly paper or completely digitized in Finance, IRS wants you to have an electronic backup stored in a secure location (preferably offsite). Things the Taxman expects you to include: bank statements, insurance policies, tax returns. It’s worth touching base with IT now to see how often key documents are being backed up. And if they are certain documents that don’t change regularly, make sure that you have the most current version in electronic form and secure right now.
  2. Take photos of valuables, layouts.Many folks think this applies to homeowners only. But Superstorm Sandy left some businesses returning to hardly-recognizable offices (some with no offices left at all). Taking photos of current office layouts and any critical pieces of technology, artwork, etc., will serve you well if the worst should happen. If you haven’t been through this exercise – or the photos you do have are out-of-date — it’s worth doing ASAP. (And be sure to include those digital photos with your offsite e-records.)
  3. Update your emergency plans. Hopefully your company has a well thought out, documented and tested disaster recovery plan. The start of summer storm season makes it a great time to update where necessary. One thing to consider: Have you added new employees since the last testing that need to be included in and trained on your plans? IRS doesn’t want you to forget about this vital step – the taxman specifically called out this aspect of preparedness.
  4. Check on fiduciary bonds. IRS is addressing this one specifically to employersthat use payroll service providers. You want to make sure your provider has a fiduciary bond in place so should it default for any reason (including storm related) your company remains protected. IRS actually has lots of information regarding payroll providers and tax compliance on its website. For example, you’ll find a list of providers approved to transmit business tax returns at www.irs.gov/uac/Payroll-Service-Providers

Yes, there are likely other steps your company likely wants to take to feel confident you’re protected should Mother Nature unleash her fury on your area this summer and early fall.

But knowing that these are the four the Taxman has specifically called out is an excellent place to start. And should you experience a disaster, compliance with theseproves you were working to be prepared.

The Service also reminded you can always call the disaster-related helpline at 1-866-562-5227 with any questions you or your finance staffer have.

Note: The document also contains links to key disaster-related resources (publications, frequently-asked-questions, etc.)from IRS.

 

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