Rebuild missing financial records

Immediate triage and documentation - Create an itemized inventory of lost records, date ranges, and highest-priority purposes (tax filing, payroll, sales tax, loan applications, insurance claims). - Photograph/scan any remaining physical evidence and document the cause (fire, theft, system failure) — this supports insurance/IRS explanations. 2) Prioritize official and third-party replacements (start here): - IRS: request tax-return transcripts and wage & income transcripts via Get Transcript or Form 4506-T. (fast, authoritative for prior returns/W-2/1099 info) - Banks & credit card issuers: request statements and cancelled checks (many provide multi-year histories on portals or by request). - Payroll providers/payroll tax agencies: request payroll reports, tax deposit records, and state unemployment filings. - Payment processors and merchant accounts (Stripe, PayPal, Square): export transaction history and settlement reports. - Vendors/customers: request copies of invoices, receipts, and payment confirmations. - State agencies: request sales-tax filings, certificates, and registration records from state DORs; obtain business entity records from Secretary of State. 3) Reconstruction methods and documentation - Use IRS-accepted methods: Bank deposits/cash-expenditures method, Markup method, or other reasonable-estimate approaches.

Document the chosen method and every assumption. - Reconcile deposits to known income sources; use POS/exported sales logs, merchant settlement totals, and credit-card reports to reconstruct revenue. - Rebuild expenses from bank/credit-card transaction details, vendor statements, lease/mortgage statements, and utility bills. - For payroll: use Form 941 reports, payroll provider summaries, state wage reports, and IRS wage transcripts as cross-checks. - Keep a reconstruction worksheet for each tax year showing sources, calculations, and links to supporting documents.

Immediate triage and documentation

2) Prioritize official and third-party replacements (start here): - IRS: request tax-return transcripts and wage & income transcripts via Get Transcript or Form 4506-T. (fast, authoritative for prior returns/W-2/1099 info)

3) Reconstruction methods and documentation

- For payroll: use Form 941 reports, payroll provider summaries, state wage reports, and IRS wage transcripts as cross-checks.

• Create an itemized inventory of lost records, date ranges, and highest-priority purposes (tax filing, payroll, sales tax, loan applications, insurance claims).
• Photograph/scan any remaining physical evidence and document the cause (fire, theft, system failure) — this supports insurance/IRS explanations.
• Banks & credit card issuers: request statements and cancelled checks (many provide multi-year histories on portals or by request).
• Payroll providers/payroll tax agencies: request payroll reports, tax deposit records, and state unemployment filings.
• Payment processors and merchant accounts (Stripe, PayPal, Square): export transaction history and settlement reports.
• Vendors/customers: request copies of invoices, receipts, and payment confirmations.
• State agencies: request sales-tax filings, certificates, and registration records from state DORs; obtain business entity records from Secretary of State.
• Use IRS-accepted methods: Bank deposits/cash-expenditures method, Markup method, or other reasonable-estimate approaches. Document the chosen method and every assumption.
• Reconcile deposits to known income sources; use POS/exported sales logs, merchant settlement totals, and credit-card reports to reconstruct revenue.
• Rebuild expenses from bank/credit-card transaction details, vendor statements, lease/mortgage statements, and utility bills.
• Keep a reconstruction worksheet for each tax year showing sources, calculations, and links to supporting documents.

Audit-readiness and evidence - Attach a clear narrative to reconstructed returns

explain why originals are missing, list sources used, show calculation steps, and include copies of third-party documents. - Obtain professional affidavits or engagement letters from CPAs/forensic accountants where reconstruction relied on professional methods. - Keep originals of all replacement documents and correspondence showing requests and responses (bank request emails, FOIA/state requests, vendor replies).

When to involve professionals - Hire a CPA or forensic accountant if there are large discrepancies, potential fraud, or if reconstructed figures materially affect tax liability or loan covenants. - Use specialists for data recovery (damaged drives) and for preparing defensible reconstruction reports.

Compliance, timelines, and retention - Federal tax statute of limitations

generally 3 years from filing (but 6 years when >25% of income omitted; longer for fraud). Keep at least 3–7 years of reconstructed records; retain longer if involved in major asset transactions or audits. - State-level differences: sales-tax, payroll-tax, and corporate-record retention/requirements vary. Check the specific state DOR and Secretary of State websites for exact retention periods and documentary requirements.

Tools, templates, and preventative steps - Tools

accounting software (QuickBooks, Xero), bank/processor exports (CSV), receipt-scanning apps (Expensify), cloud backups (Drive/OneDrive), and secure encrypted offline backups. - Templates to create now: loss inventory, reconstruction worksheet (by year and account), audit narrative template, request log (who you asked, date, response). - Preventive: enable automatic bank feeds, retain digital copies off-site, implement regular backups and retention policy, and use integrated receipt capture.

Example checklist (what to request, in order)

- IRS transcripts (Get Transcript/Form 4506-T) - Bank monthly statements and cancelled checks - Credit-card statements and merchant settlement reports - Payroll processor reports, Form 941, state wage reports - Customer invoices and receipts, vendor invoices - Sales-tax returns and state filings - Insurance claim documents and property records Practical next step for you: use the checklist above to compile a prioritized list (start with IRS transcripts, bank statements, payroll records), create a reconstruction worksheet for the most recent tax year or contested period, and engage a CPA if totals materially affect tax or lender obligations.