Businesses can take these steps after a disaster

IRS Tax Tip 2018-180, November 21, 2018

When disaster strikes, many business owners might find themselves needing to reconstruct records. This will help them prove a loss, which may be essential for tax purposes, getting federal assistance, or insurance reimbursement.

Here are tips for businesses that need to reconstruct their records:

  • To create a list of lost inventories, business owners can get copies of invoices from suppliers. Whenever possible, the invoices should date back at least one calendar year.
     
  • For information about income, business owners can get copies of last year’s federal, state and local tax returns. These include sales tax reports, payroll tax returns, and business licenses from the city or county. These will reflect gross sales for a given period.
     
  • Owners should check their mobile phone or other cameras for pictures and videos of their building, equipment and inventory.
     
  • Business owners who don’t have photographs or videos can simply sketch an outline of the inside and outside of their location. For example, for the inside the building, they can draw out where equipment and inventory was located. For the outside of the building, they can map out the locations of items such as shrubs, parking, signs, and awnings.

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