Natural disasters like hurricanes, wildfires, floods, and tornadoes are increasingly becoming more frequent and severe. With the disaster season approaching its peak, the Internal Revenue Service (IRS) is reminding taxpayers that they should now prepare in advance to help keep their financial records safe, secure their vital tax-related documents, and have continued access to critical services.
In the case of businesses, particularly small and mid-sized, disasters not only put the property and inventory at risk but also affect payroll, tax due dates, and compliance procedures. The same happens to individuals who have to claim relief, refunds, or insurance settlements, but they lack the tax documents.
In this comprehensive guide, we’ll break down the IRS’s emergency preparedness recommendations, outline key steps you should take, and explain how TaxProNext can help businesses and individuals create a disaster-ready tax plan.
1. Why Emergency Preparedness Matters Now
September marks National Preparedness Month, making it the perfect time to review and strengthen your emergency plans. The IRS emphasizes that tax readiness should be part of every disaster plan because financial and legal records are often required for:
- Claiming casualty loss deductions on tax returns
- Requesting federal disaster relief extensions
- Verifying identity when filing replacement returns
- Managing payroll compliance during disruptions
“Natural disasters strike without warning. Having your documents and processes in place today could save you weeks or months of recovery time tomorrow.” – IRS Advisory 2025
According to the IRS, disaster relief provisions are automatically activated when the Federal Emergency Management Agency (FEMA) declares a federal disaster area. However, to access these benefits, taxpayers must be able to verify their losses and provide accurate tax information. Without proper records, these opportunities can be delayed or lost entirely.
2. IRS Recommended Steps for Disaster Preparedness
The IRS provides the list of the key steps that should be done by businesses and individuals prior to the time disaster season arrives. These measures will make sure you are equipped with the correct records, tools, and systems to act swiftly and reduce financial damage.
A) Safeguard Critical Documents
The first priority in disaster readiness is protecting vital financial and legal records, including:
- Tax returns for the past 3-7 years
- Social Security cards, birth certificates, passports
- Insurance policies and property titles
- W-2, 1099, and payroll tax documents
- Bank statements and investment records
Storage Best Practices:
1. Waterproof and Fireproof Containers: The hard copies are to be stored in a safe place in disaster-proof safes or lockboxes.
2. Digital Backups: Get encrypted files containing all the valuable documents and keep them in a secure cloud backup.
3. Offsite Storage: Keep a duplicate with a relative, business partner, or lawyer out of the disaster zone.
Pro tip: To minimize access complexity in case of emergencies, TaxProNext suggests installing a cloud-based record management system that will be linked to payroll and tax software.
B) Create a Detailed Inventory of Assets
A thorough inventory makes it easier to file insurance claims and substantiate tax deductions for disaster-related losses.
- Take Photos and Videos: Take photos and videos of every room, equipment, vehicle, and high-value item.
- Add Serial Numbers: Inscribe make, model, and serial numbers on electronic, machinery, and specialized tools.
- Use IRS Workbooks: To assist individuals and businesses, the IRS offers free Disaster Loss Workbooks to assist in the compilation of these records.
Having a digital inventory can drastically speed up the claims process with both insurers and the IRS.
C) Verify Payroll Service Protections
For employers, payroll continuity is critical during disasters. If your payroll provider is compromised, it could result in missed payments, tax penalties, and even lawsuits.
- Confirm Fiduciary Bonds: Ensure your payroll provider carries a fiduciary bond, which protects your business if the provider fails to deposit payroll taxes on your behalf.
- Set Up EFTPS Access: The Electronic Federal Tax Payment System (EFTPS) allows you to make direct federal tax deposits securely, even if your payroll system is offline.
- Disaster-Ready Payroll Software: Consider upgrading to cloud-based payroll software with offline capabilities and secure backups.
D) Know the IRS Disaster Relief Process
When the federal government declares a disaster area, the IRS automatically provides filing and payment deadline extensions for affected taxpayers.
Key IRS Relief Features:
- Automatic deadline extensions based on your address of record
- Ability to claim casualty loss deductions in the current or previous tax year
- Priority assistance via the IRS disaster hotline: 866-562-5227
People who are not within the declared zone, but were indirectly affected (e.g., a relief worker or lost tax documents), are allowed to request relief manually by calling the hotline.
Example: The IRS gave businesses and individuals who owned property in a county hit by wildfires an extension to October 15 to file tax returns in the case of California wildfires in 2025.
3. Steps to Take Immediately After a Disaster
Even with preparation, disasters can cause significant disruption. Knowing what to do immediately after can help you recover faster and protect your tax standing.
1. Contact the IRS Disaster Hotline
Call 866-562-5227 to:
- Report lost or destroyed records
- Request disaster relief information specific to your location
- Get guidance on filing amended returns or claiming losses
2. Replace Lost Tax Documents
- Tax Transcripts: Use the Get Transcript tool on IRS.gov to retrieve prior-year tax records.
- W-2 and 1099 Forms: Contact employers or banks for replacement copies.
- Business Records: Digital copies may be provided by several institutions, such as insurance companies, payroll providers, etc.
3. Claim Casualty Loss Deductions
Individuals and businesses can claim some losses in the event of a disaster on tax returns.
- You can choose to claim the loss in either the current or previous tax year, depending on which provides the greater tax benefit.
- Consult a tax professional like TaxProNext to ensure accurate calculations and documentation.
4. Emergency Preparedness for Businesses
Businesses face unique challenges when preparing for disasters. Beyond protecting documents and payroll, you must ensure operational continuity and compliance.
Business Continuity Checklist:
- Create a disaster response team with clear roles.
- Establish a communication plan for employees and clients.
- Identify backup suppliers and alternative distribution channels.
- Test your remote work systems and cloud-based accounting tools.
- Develop a data recovery protocol with secure, redundant backups.
Tip: TaxProNext offers customized disaster-preparedness consultations for businesses, focusing on tax, payroll, and compliance continuity.
5. IRS Resources for Disaster Relief
The IRS provides several online and phone resources for disaster victims:
| Resource | Purpose |
| IRS Disaster Assistance Page |
Latest updates on disaster relief programs |
| IRS Disaster Hotline: 866-562-5227 |
Speak directly to IRS disaster specialists |
| Get Transcript Tool |
Retrieve lost tax transcripts instantly |
| EFTPS Enrollment |
Securely make federal tax payments online |
| Disaster Loss Workbooks |
Downloadable PDFs for inventory documentation |
6. How TaxProNext Helps You Prepare and Recover
At TaxProNext, we go beyond tax filing, we help businesses and individuals future-proof their financial systems. Our services include:
- Pre-Disaster Readiness Reviews: Identify vulnerabilities in your tax and payroll systems.
- Digital Records Maintenance: Replace paper records with cloud-based vehicles.
- Post-Disaster Recovery Assistance: The assistance on casualty losses, revised returns, and the relief programs of the IRS.
- Payroll Continuity Planning: Implement EFTPS and disaster-ready payroll solutions.
7. Final Tips: Building Long-Term Resilience
Although there is nobody who can stop natural disasters, planning minimizes their effects. Here’s a quick recap:
- Act Now: Do not wait until a calamity has begun to begin to glean records and set up backups.
- Go Digital: Docs are exposed- secure cloud-based storage is needed.
- Be Informed: Subscribe to IRS information, particularly at the time of hurricanes and wildfires.
- Seek Expert Help: TaxProNext offers specialized guidance to keep your finances disaster-ready.
Conclusion
Disasters can strike anytime, disrupting lives, businesses, and financial systems. By following the IRS’s emergency preparedness guidelines and taking proactive steps, you can safeguard your records, access vital tax relief, and recover faster.
TaxProNext is here to help you build resilience, protect your assets, and navigate the complex tax landscape during times of crisis.
Contact us today for a free Disaster Readiness Consultation and get your tax and payroll systems ready before disaster season peaks.
