How to access and reconstruct lost or destroyed records
First don’t panic, the IRS realizes you aren’t the first person to have records lost or destroyed.
Natural disasters such as hurricanes, tornadoes, floods and fires destroy many taxpayers records each year.
All of the income records that the IRS has about you can easily be obtained from the IRS. You can get free IRS transcripts immediately by visiting the Get Transcript tool on IRS.gov.
There are several types of IRS transcripts. The Wage and Income Transcripts include information such as W2, 1099, interest & dividend income and mortgage interest, which are needed to prepare tax returns.
Additionally, there are two types of Wage and Income Transcripts that you can request. Masked transcripts are the default transcripts and do not have all of the information required to efile. The masked transcripts show only the last four digits of any EIN listed on the transcript (example XX-XXX1234). The IRS created masked transcripts to better protect taxpayer data from cybercriminals.
For return preparation, a taxpayer may also order an unmasked Wage and Income Transcript from the IRS. The taxpayer must first authenticate their identity with the IRS and an unmasked Wage and Income Transcript will be mailed to the address of record within five to 10 days. However, it can often take many hours to get through to the IRS on their phone lines.
A faster method to get the unmasked transcripts is to contact a licensed tax professional. Tax professionals with proper authorization may request unmasked Wage and Income Transcripts for tax preparation. They can call the IRS on the Tax Practitioner Hotline and order the required transcripts. Normally they can obtain your unmasked transcripts in a matter of minutes.
If you have a business, reconstructing records is more challenging.
For information about income, get copies of bank statements. The deposits should closely reflect what the sales were for any given time period.
You should also get copies of last year’s federal, state and local tax returns. This includes sales tax reports, payroll tax returns and business licenses from the city or county. These will reflect gross sales for a given time period and will provide necessary payroll information.
Next you will need to reconstruct your business expenses. This can be a fairly complex process which will require research to determine average business expenses for your type of industry and other calculations for your business expenses.
You can also contact an expert tax professional with experience in reconstructing tax records. Their expertise with reconstructing records should help to make the process go as quickly and smoothly as possible.
Masked transcripts can easily be obtained from the IRS online. However, if you need more than masked transcripts and are stressed over your loss it may be best to turn the process over to an expert tax professional so that you can go about your life as normally as possible.
David Zubler is a tax accountant and Enrolled Agent representing clients before the IRS with over 25 years of tax experience. He is the author of four tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, YourTaxCare.com. David can also be contacted by email at firstname.lastname@example.org