Is the IRS really warning that emergency tax relief will no longer be allowed? I doubt it. Last week, the IRS issued a warning to taxpayers to safeguard and anticipate information needed for various tax issues in the event of an emergency during this year’s hurricane season. Typically, the IRS offers tax relief to victims and affected areas of natural disasters and other crises, such as the Oklahoma tornados and the Boston marathon bombing.
While the IRS has many many many faults, some of which are just finally being made public, I don’t think even the IRS would disallow emergency tax relief in the event of a hurricane disaster, and then point to their May 29, 2013, news release as warning taxpayers that they should have been more prepared during hurricane season. The warning may be filed under “preventative education”.
The preventative education provided by the IRS are reminders of some of the safeguards that we all know we need to take to keep our financial affairs in order, but will also allow you to maintain tax compliant in the event of an emergency. This includes:
- Creating an electronic backup of your records that can be accessed via the internet or other electronic format. Additionally, non-internet backup records should be stored in a secondary location;
- A photo and video record can help prove the market value of real property and tangible items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area. However, these days photos and videos can also be easily uploaded and downloaded online.
- Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.
These precautions may help you be prepared tax-wise in the event of an emergency. While emergency tax relief will likely be offered as emergencies arise, a consultation with a tax relief attorney will ensure that your tax rights are protected even when there isn’t a natural disaster.