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When does executive protection move beyond being a perk and become a business necessity?
Recent trends make the answer clear: security is no longer optional for today’s leadership. Rising threats, from online harassment to targeted incidents have made personal protection a key part of business continuity and risk management.
Even the IRS recognizes this. Under IRS Code Section 132, certain security-related expenses can qualify as “working condition fringe benefits.” That means they are deductible for the company and not considered taxable income for the executive, provided the protection is deemed necessary for their job performance.
This recognition underscores what many companies are already realizing: executive protection isn’t a luxury. It’s an essential investment in leadership security and organizational stability.
What IRS Code 132 Means
At its core, Section 132 acknowledges that when executives face legitimate, work-related risks, security expenses aren’t about personal preference, they are business-related necessities.
This can cover:
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Security measures for executives at high risk due to their role or visibility
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Protection during corporate travel or major business transitions
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Safeguards tied to sensitive negotiations, restructurings, or high-profile decisions
By classifying these expenses as working condition fringe benefits, the IRS effectively places executive protection in the same category as other legitimate business tools that support an executive’s ability to perform their role.
Why This Matters for Companies
For organizations, the implications go beyond accounting. IRS Code 132 reinforces a critical shift: executive protection is part of responsible corporate governance.
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Risk Management: Security is integrated into protecting leadership, intellectual property, and corporate reputation.
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Board-Level Priority: Directors and stakeholders are increasingly expected to ensure leadership safety as part of fiduciary duty.
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Financial Efficiency: Recognizing these expenses as deductible reduces the barrier to implementing necessary protection measures.
The Bigger Trend: Protection as Priority
The inclusion of security within IRS guidelines reflects a broader trend in the corporate world. In the past five years, more companies have expanded their executive protection programs, citing online exposure, activist threats, and geopolitical risks.
Industry data shows:
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Executive protection spending has reached record levels, with budgets rising year-over-year.
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More than a third of U.S. executives now receive some form of protection as part of their role.
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Boards are viewing protection as an investment in continuity, not a discretionary benefit.
These shifts align with the IRS’s recognition that protecting executives is directly tied to their ability to perform in their roles.
Aligning Security with Business Stability
For today’s companies, the message is clear: executive protection is not just about keeping individuals safe, it’s about protecting the organization as a whole.
IRS Code 132 doesn’t replace the need for sound security strategy, but it reinforces what we see every day: safeguarding leadership is a legitimate, business-critical responsibility.
At USI, we partner with organizations to design protection strategies that blend foresight, intelligence, and discretion. Because when executives are secure, businesses are stronger.
This information is provided for general awareness and should not be considered tax or legal advice. Organizations should consult with their tax professionals regarding the application of IRS Code 132 to their specific circumstances.