Travel Risk Management & Secure Transportation Consulting – IRS 132.5 Assessments
According to the IRS, if a security concern exists which is found to be business related, that company may exclude certain expenditures related to an at-risk employee.
IRS 132.5 – Fringe Benefits: Corporate executives and high net-worth individuals within a recognized corporate structure often receive extraordinary fringe benefits not provided to other employees of that same company which are subject to taxes. The Internal Revenue Code was amended in 1964 to include the term “fringe benefits” in the definition of gross income which must be treated as compensation to be included as income under section 61 unless there is a specific statutory exclusion that applies to the benefit.
This benefit applies to Executive Security programs if an overall security program will be deemed to exist in situations where the employer conducts and implements an “independent security study” with respect to the at-risk employee. Corporate executives often receive extraordinary fringe benefits associated with company provided security services which must then be treated as personal income by the executive. Section 1.132.5 includes a provision for engaging a third-party consultant to conduct an independent security study which can result in the company not having to claim the security services as a fringe benefit to the executive. This requires an independent third-party consultant to provide an objective assessment of security needs and to then develop a needs based recommended security program for the executive. If the company then applies the specific security recommendations contained in the consultant’s security study, the associated company provided security services can be excluded as a fringe benefit and do not have to be recognized as additional income by the executive.
As an independent party review, the PSA provided by LaSorsa and Associates will list realistic recommendations based on best industry practices, leveraging decades of experience and a proven methodology based on US Secret Service doctrine.
Our Methodology for IRS 132.5 Assessments includes:
- Estate Security & Executive Suite Security
- Ground and Air Transportation
- Special Risk Insurance & Preparedness
- On-Going Threat Analysis
Step One – Risk, Threat and Vulnerability Assessment
To provide a sound basis for the decision-making process involved in determining what configuration a personal security program should adopt, it is necessary to determine what potential threat conditions exist. Many factors affect the RTVA and changing variables often influence those conditions.
Step Two – Residential Security: A Comprehensive Plan
This element will assess the adequacy of existing security measures that are in effect at the executive’s residence and examines the security program from both the equipment and the procedural standpoint.
Step Three – Office and Facility Security
Office configurations, access control, evacuation, and other emergency response topics will be assessed in this phase. This portion of the assessment will focus primarily on building access control and more specifically, the ability of someone to access the principal’s office area(s).
Step Four – Information Security and TSCM
During the residential assessment, we will look at phone systems), computer network security (including wireless) and how family and residential documents are disposed of.
Step Five – Travel Security and Assessment Processes
This portion of the assessment focuses on security requirements and procedures associated with local, domestic and international travel by the executive. It addresses means of transportation as well as policies, procedures and routines.
Step Six – Report and Recommendations
Upon completion of Steps 1-5, our team will analyze the information gathered and assemble a written report detailing the types of threats being faced by the executive along with specific recommendations for mitigation measures. This report can then be utilized by the company to serve as the basis for exclusion of certain expenditures in compliance with IRS 1.132-5.
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