Understanding IRS 132 and Independent Security Studies

Understand How To Benefit From An Independent Security Study (ISS)

Sometimes an employee can receive a working condition fringe benefit, a property or services that, if the employee had paid for the cost would have been allowable as a business expense deduction. However, use of that service may be essential for non-business activities and therefore must be treated as compensation and included as income under § 61; UNLESS, there is a specific statutory exclusion that applies to the benefit.

Under § 1.132 5, certain statutory exclusions exists if a “bona fide business-oriented security concern” is present. A “bona fide business-oriented security concern” exists only if the facts and circumstances establish a specific basis for concern regarding the safety of an employee. Treas. Reg. § 1.132 5(m)(2)(i).

To establish a “bona fide business-oriented security concern” the employer must:

Provide a comprehensive "Over-all Security Program"

Commission an Independent Security Study (ISS) from a qualified third-party security consultant.

Establishing Your Independent Security Study

An “independent security study” exist if the following are met:

A security study is performed with respect to the employer and the employee by an independent security consultant
The security study is based on an objective assessment of all facts and circumstances
The recommendation of the security study is that an overall security program is not necessary and the recommendation is reasonable under the circumstances
The employer applies the specific security recommendations contained in the security study to the employee on a consistent basis. Treas. Reg. § 1.132-5(m)(2)(iv)

Independent Security Studies are required to be conducted ethically and continuous

Studies are multi-purpose; Assess threat environments, Justify security investments, & Mitigate executive exposure risks

Our experience includes high-profile executive protection assignments, threat investigations, cyber security, and geopolitical intelligence briefings for corporate and private-sector clients. We blend frontline instincts with strategic risk models — offering clients unmatched insight and credibility.