If you’re wondering whether private protection is tax-deductible or how to properly structure your security services to take advantage of available write-offs, this article provides the essential guidance you need. You’ll learn what qualifies for security guard tax write-offs, what doesn’t, and how to strengthen your eligibility through security vulnerability assessments and documentation.
IRS Section 132 outlines “fringe benefits” that employers can provide to employees without those benefits being taxed as income. Most people know about company cars or gym memberships, but few realize that certain private security services, like executive protection or estate security, if deemed necessary for an employee’s personal safety, also fall under this section.
This means that under the right conditions, you may be able to deduct security costs as a business expense, while the protected executive or employee avoids being taxed on the value of that benefit. The IRS permits this when the need for protection stems from a real and substantiated threat.
But qualifying under Section 132 requires more than just hiring a guard. That’s where risk assessments come into play.
Explore this article to learn how executive protection services minimize risk for high-profile individuals.
The IRS doesn’t approve deductions based on gut feelings or general concerns. The threat must be:
That means you’ll need a professional security service threat assessment or security vulnerability assessment to demonstrate that an employee is at elevated risk.
These assessments are often performed by private security firms and involve a combination of:
Once completed, the documentation helps protect you in case of an audit, and more importantly, it provides the foundation needed to justify the expense as reasonable and necessary under the 132 tax code.
Take the first step in using the IRS’s 132 tax code to write off your security expenses by exploring Iron Shield Protection’s risk assessment services to see how we pinpoint your vulnerabilities and develop solutions that safeguard you from them.
A security vulnerability assessment is more than just a checklist. It is the starting point for determining whether your business can justify security expenses under Section 132.
These assessments evaluate threats like:
The assessment uses detailed metrics and historical data to provide credible justification for enhanced protection. It also guides what type of service is appropriate, whether that’s an armed security presence, on or off-site surveillance, or secure transportation protocols.
For IRS purposes, the final report must outline:
As physical and digital threats continue to grow, proactively assessing the risks executives face is essential for crafting personalized cybersecurity protections. This informative guide explains this critical step.
Let’s explore which services may qualify and what kind of protection they typically involve.
Services may be deductible when used to mitigate a known threat, especially for key employees or executives. Common qualifying expenses include:
While some of these services clearly fall within traditional security roles, the key to deductibility is linking them to an identified threat through formal documentation. Without that step, these services could be seen as optional perks, which the IRS typically does not allow to be written off.
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Some industries face higher risk by nature of the work. Here are a few where IRS Section 132 is especially relevant:
Tech executives often deal with sensitive intellectual property and significant financial transactions. They may be targeted by activists, hackers, or disgruntled insiders.
Digital threats can escalate into physical threats, especially when an executive’s personal information is exposed online. Combining executive protection and cyber risk services ensures that high-level staff are protected across all vectors.
Executives in healthcare, especially those in pharmaceutical companies or large provider systems, often deal with controversial or life-altering products. Protests, angry patients, or activist groups may pose physical risks.
If your leadership receives threats due to public-facing roles, a formal threat assessment allows you to justify protective expenses under Section 132 of the tax code.
Wealth attracts attention. Finance executives are more vulnerable to theft, stalking, and even kidnapping attempts in rare cases. During M&A deals, IPOs, or layoffs, they may also face threats from angry stakeholders or clients.
Ongoing protective details during such periods are often tax-deductible, along with the proper paperwork.
Even with legitimate threats and credible documentation, your deductions can still be challenged if they aren’t properly structured or justified. These best practices help ensure your private security expenses remain compliant under the 132 tax code.
The IRS values documentation created by recognized experts. Working with a licensed provider ensures your risk evaluations are professionally executed, clearly written, and legally defensible, all essential for substantiating claims during audits or financial reviews.
Detailed records serve as your paper trail. Maintain all assessments, signed contracts, and billing statements that reflect the purpose and scope of services rendered. Organized documentation demonstrates accountability and makes defending deductions significantly easier.
Security services used solely for vacations or social events often fall outside allowable deductions. To stay compliant, restrict coverage to business-related risks or travel tied to executive duties where a documented threat exists.
Risk levels change. What qualified for protection last year may not hold this year. Conduct annual reviews to confirm ongoing threats, refresh assessments, and ensure your tax filings reflect current, necessary protections for key personnel.
Iron Shield Protection delivers discreet, tax-deductible security services backed by expert risk assessments and nationwide experience. Our team helps you meet IRS Section 132 requirements while safeguarding your people, operations, and finances. Contact us today to discuss your security needs and learn how we help protect what matters without compromising your bottom line.
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Do You Qualify for IRS Security Tax Deductions? How To Meet 132 Code Eligib...