This summer, the U.S. has been subjected to more than its share of natural disasters.
While disaster survivors may look at their tasks mainly as clearing debris and rebuilding structures, there’s another tool in the recovery tool belt that is just as important: actions that rebuild the taxpayer’s financial records.
Obtaining their tax records after a natural disaster can act as a foundation for their rebuilt lives. Taxpayers need records that will help them prove their loss of property and in turn, will help them recover the loss by supporting insurance claims or federal assistance.
We’ve got some simple steps to keep in mind when faced with a major disaster.
Step One: Get Tax Records
Tax records are handy in a number of ways, from proving the taxpayer’s legal address to providing vital data to qualify for federal assistance when a federal disaster area is declared.
For those who have internet access, free tax return transcripts can be obtained immediately using the Get Transcript tool on IRS.gov. If no internet service is available, taxpayers can call 800-908-9946 and follow the voice prompts to order transcripts.
Don’t forget about other financial statements, such as credit card statements or those from a bank. These may be available online, but taxpayers can also contact those institutions directly to get paper copies if needed.
Step Two: Get Property Records
The IRS has a number of suggestions on obtaining property records after a disaster. These become even more important when entire structures are swept away or destroyed:
- To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
- Those who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
- For inherited property, check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
- When no other records are available, check the county assessor’s office for old records that might address the value of the property.
- Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries, including Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.
More Resources
For the most up-to-date information and instructions from the IRS, tap into these resources, including Publication 547, Casualties, Disasters, and Thefts; Publication 584, Casualty, Disaster, and Theft Loss Workbook; Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook; Publication 976, Disaster Relief; or visit Small Business Administration or DisasterAssistance.gov online.
Source: IRS Tax Tip 2021-125
https://www.drakesoftware.com/content/irs-has-tips-for-rebuilding-tax-records/