Mobility Matters

The safety and well-being of corporate executives have become a top priority for businesses in the United States, particularly in light of the recent rise in security threats. As a result, many employers are now providing personal security for their executives, a move that comes with significant tax implications. However, only a minority of employers are fully aware of the complex tax rules that govern these benefits. To avoid unwelcome surprises, it's crucial for employers to understand the key components of a compliant executive security program, including the tax consequences of various security measures and the importance of adhering to the recommendations of an independent security study.

A well-documented security program is not enough to maintain compliance. Employers should also establish a "bona fide business-oriented security concern," which must be specific and substantiated, not just a generalized worry about safety. This concern must be supported by an overall security program that includes consistent measures, such as 24-hour protection at home, work, and during travel. Additionally, employers must follow the recommendations of an independent security study, which must be tailored to the specific executive and performed by a qualified and independent security consultant. By understanding these nuances, employers and executives can make informed decisions that protect both the individual and the company.