What You Need to Know About Code 132
Executive Protection and the IRS
For many high-net-worth individuals and C-suite executives, executive protection services are more than a perk—they’re a necessity. But when those services are paid for by the company, they can raise red flags with the IRS if not properly classified.
Understanding IRS Code 132
IRS Code 132 allows companies to treat executive protection as a non-taxable fringe benefit—but only under specific conditions. If the benefit is deemed excessive or unnecessary, it could be considered taxable income, leaving both the company and the executive vulnerable to financial and legal consequences.
What Can Trigger an IRS Audit?
Lack of documented threat assessments
Inconsistent or ad hoc protection practices
Absence of a written security policy
No formal audit or justification for services rendered
How CSG Helps Clients Stay Compliant
We conduct IRS 132 audits to ensure your executive protection programs align with IRS requirements. Our assessments include:
Threat analysis documentation
Justification of protection measures
Policy and protocol review
Guidance on aligning physical security with tax compliance
The goal isn’t just compliance—it’s credibility. And in high-stakes environments, credibility is everything.