IRS 1.132-5 Security Study
Certifying Executive Protection programs for compliance to IRS regulation 1.132-5 "Exclusion of certain working condition fringes" as they pertain to air, land and sea transportation because of security addresses Internal Revenue Service Regulation §1.132-5(m)(1), exclusion of certain "working condition fringes" from an employee's gross income computation.The regulation allows for exclusion of security related costs such as employer provided transportation (i.e. protective staff, vehicles and aircraft), once specific conditions have been met.
Section 1.132-5(m)(2)(ii) provides that an overall security program must be established. In order to establish the existence of an overall security program, the employer must generally establish that security is provided to the employee on a 24-hour basis.
However, under §1.132-5(m)(2)(iv), an overall security program is deemed to exist if the following conditions are satisfied:
· A security study is performed with respect to the employer and the employee (or a similarly situated employee of the employer) 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 (as defined in paragraph (m)(2)(iii) of this section) is not necessary and the recommendation is reasonable under the circumstances; and
· The employer applies the specific security recommendations contained in the security study to the employee on a consistent basis.
An independent security study could conclude, for example, that security during air travel is necessary, but security on a 24-hour basis is unnecessary.
The Welsh-Sullivan Group Team will provide a report that will address the current security of a named Principal as to his/her compliance to the above IRS regulation and make specific recommendations to either bring the security into compliance or maintain its current status.
The study will identify any security concerns for the Principal and or the company, and make specific recommendations to improve the current level of security. The Team will review all the critical factors that are part of a well managed security program.