There are specific rules that the IRS has laid out for Security Driving. If an employer provides an employee with vehicle transportation and a bodyguard/chauffeur for a bona fide business-oriented security concern, and but for the bona fide business-oriented security concern the employee would not have had a bodyguard or a chauffeur, then the entire value of the services of the bodyguard/chauffeur is excludable from gross income as a working condition fringe. The key phrase is “bona fide business-oriented security concern”

A bona fide business-oriented security concern exists only if the facts and circumstances establish a specific basis for concern regarding the safety of the executive. A generalized concern for the executive’s safety will not trigger the application of the security exclusion Under IRS Code § Regulations § 1.132-5(m)(1) the employer must demonstrate the existence of a bona fide security concern.

Examples of specific bases for a bona fide security concern include a specific threat to harm the employee or a recent history of violent terrorist activity in the geographic area in which the transportation is provided. 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.