Reconstructing Records

Now that wildfires have been added to the list of disasters for which some tax relief measures have been granted, our ability to feel safe keeps being chipped away at. As these situations come at us with alarming regularity, they have caused many stories and tips (including from me) to be put out there in the hopes of helping people prepare for such events. What if it’s already too late, though?

It is that situation that prompted the IRS to release some tips for those who need to reconstruct records after a disaster. I think they’re worth mentioning here, for not only is it good advice and guidance for those who are in the unfortunate situation of needing to immediately heed it, but it also gives some ideas on how you might want to handle recordkeeping to try to mitigate the pain, hassle, and heartache that disaster may cause.
For overall, the more organized you were beforehand (while hopefully seeing the need to keep those organized records in more than one place), the easier it will to put things together afterward.

But if you need to still create a list of lost inventory, contacting suppliers for past invoices can help you start to document goods that you purchased. This won’t necessarily allow you to arrive at any final numbers, but will provide a baseline of information to work with.
Those numbers can work hand in hand with income, too, some of which can be found from old tax documentation. This includes federal, state, and local returns, but if you’re a business, don’t stop there,, for you should also be able to acquire sales tax reports and payroll tax documentation.

All this can start to give you numbers, but one could be most interested in trying to document the loss of property. Much of that may not be recorded in any of the above documents, especially for types of property that you have had for years, and frankly, those can often be some of the more valuable pieces you own.

The best thing to do in that situation is have photos or videos of the property. It is good practice to keep such evidence for insurance documentation, but even if you did not take that step in a proscribed and clinical way, the IRS offers the interesting idea of checking your mobile phone and other cameras for anything that could have been captured on photos or videos that you have there.

Barring that, though, business owners should still sketch out the interior and exterior of their locations, nothing where equipment and inventory was located. For the outside of buildings, note as many things as possible as landmarks, include parking areas, and include anything damaged in the incident.

These are just small tips, but at least they offer some guidance for those who could be in situations where they feel helpless. To keep yourself from becoming helpless in the future, though, think of those steps you could take now to ease the pain of future disasters. There’s no way to make such things easy, but simple steps will feel much bigger when you’re in a situation that makes you glad they were taken.

Warmly,

Nicole Odeh
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