IRS §132 Security Assessments

• Residential Security
  • Security Systems and Monitoring
  • Guards
  • Secure Rooms
  • Security for Spouse and Children
• Vehicle Transportation
  • Security Drivers and Chauffeurs
  • Security Designed Vehicles
• Air Transportation
  • Commercial Flights
  • Corporate Jet Flights
  • Specially Chartered Flights
  • Corporate Aircraft Facilities
• Office Security

Understanding IRS 132 Assessments

In today’s world, safety concerns are a top priority for corporations, executives, and key decision-makers. Many companies provide extraordinary fringe benefits to protect high-profile employees from potential risks. However, without proper documentation, these benefits could be considered taxable income under IRS regulations.

IRS Code 132 allows certain security expenses to be classified as tax-exempt or reduced taxed when they are part of an employer’s overall security program. Multiple major domestic and multinational corporations have engaged Checkers to conduct IRS 132 assessments to help justify these benefits and ensure compliance with tax laws.

What is IRS Section 132?

The Internal Revenue Code 132 outlines tax exclusions for certain fringe benefits that employers offer to their employees. Typically, any benefit given to an employee is considered taxable income under IRS Section 61, unless a specific exemption applies.

IRS Section 132 includes a category called working condition fringe benefit, which allows companies to cover necessary security expenses without treating them as additional taxable compensation. These benefits must be essential for the employee’s safety and part of a documented overall security program to qualify for tax exclusions.

How Our Security Risk Assessments Support Tax-Exempt Benefits

To help businesses ensure their security-related fringe benefits are IRS-compliant and tax-exempt, we provide comprehensive security risk assessments and independent security surveys that follow Code Section 132 guidelines.

As part of our assessment, we:

• Conduct formal security evaluations to identify potential threats to key personnel and justify security measures.
• Perform an independent third-party security survey, documenting the need for specific protections in accordance with IRS Section 132.
• Develop a customized report outlining key insights, recommendations, and supporting documentation based on our findings.
• Assist in IRS compliance documentation, ensuring that security benefits meet the criteria for tax-exempt status under Code Section 132.

By working with us, businesses receive expert guidance on security planning, risk mitigation, and tax-exempt benefit compliance, ensuring that their executive protection measures are properly justified and structured for maximum tax advantages.

Who Needs an IRS 132 Assessment?

Organizations that provide security-related fringe benefits should undergo an IRS 132 assessment to validate and justify these expenses. This applies to:

• Corporate executives and key decision makers who may be at risk due to their positions
• High-profile individuals whose roles expose them to potential threats
• Companies providing security services as part of employment benefits
• Businesses seeking tax deductions for security-related costs

The IRS 132 assessment ensures that these security benefits align with tax regulations and do not result in unnecessary tax liabilities for the employer or the employees.

Common Security Benefits Covered Under IRS Code 132

To qualify for IRS tax exemptions, security-related benefits must be directly tied to an employee’s safety needs. Commonly covered expenses include:

1. Residential Security
   1. Security system installations and monitoring
   2. On-site or personal security guards
   3. Secure rooms or panic rooms
   4. Security coverage for spouses and children
2. Vehicle Security
   1. Professionally trained security drivers and chauffeurs
   2. Specifically designed armored or security-advanced vehicles
3. Air Transportation Security
   1. Business-related commercial flights with added security measures
   2. Corporate jet flights for high-risk executives
   3. Specifically chartered flights for security purposes
   4. Secure access to corporate aircraft facilities
4. Office Security
   1. Advanced security systems for corporate headquarters
   2. Physical security measures to prevent unauthorized access

By properly assessing and documenting these expenses under Tax Code 132, businesses can ensure these security measures are classified as necessary protections rather than taxable income.

Why Conduct an IRS Code 132 Security Assessment?

An IRS 132 assessment provides significant benefits to businesses, executives, and employees. The key advantages include:

1. Risk Evaluation and Security Planning
   1. Identify potential threats and security vulnerabilities
   2. Helps establish a comprehensive security program tailored to the business and employee needs
2. Compliance with IRS Regulations
   1. Ensures security-related benefits are properly documented and tax-exempt
   2. Reduces the risk of IRS audits or disputes over taxable fringe benefits
3. Protection for Executives and Key Personnel
   1. Provides essential security measures for high-risk employees
   2. Extends protection to an employee’s spouses and children, when necessary
4. Potential Tax Deductions for Security Expenses
   1. Covers qualified security expenses under IRS Section 132
   2. Allows businesses to deduct costs for security-drive air transportation, security-trained drivers, and executive protection services

Ensure Compliance and Security with Checkers

Navigating the IRS Section 132 tax regulations can be complex, but businesses can protect their employees and financial interests with the right approach.

At Checkers, we specialize in conducting IRS 132 assessments for corporations, ensuring that security-related benefits are properly documented and IRS-compliant. Our independent third-party evaluations will provide you with a report and security survey including relevant insights to establish and maintain essential security protection for the corporation, your employees, and their families while avoiding unnecessary tax liabilities.

Secure your team and optimize your tax benefits with a professional IRS §132 security assessment. Contact us today to get started.