Exposing Your Client to IRS Audits and Tax Penalties Is Not a Good Career Move

If a provider supplies “Secure Transportation” They Must Be In Compliance With The IRS Code That defines Secure Transportation.

There are many secure transportation providers that use those two words as a marketing tool, BUT if a supplier does not comply with the IRS code, they expose their client to financial risk.

If the Secure Transportation supplied does not meet the IRS Code, the cost of that transportation is considered a perk to the executive. As a perk, the executive will be required to pay tax on the amount of the service. If the executive or their company believe that the service provided is as advertised (Secure Transportation) but, in fact, it does not meet the IRS Code, specifically in the code that defines Security Driver, then the executive unknowingly is personally responsible for the taxes on the amount of that service. If this scenario continues over a period, the executive is personally responsible for the tax on the service, the interest, and penalties, which can be a considerably large sum of money, not to mention one pissed off executive. I would suggest reading Joe Autera’s article “Perk or Prerequisite: the Security Driver from a Business Perspective” to find more info about the code. Also consider that if the company has a K&R policy, they also have a requirement of Secure Transportation.

Also, not all protection markets may be affected by the IRS code. So I will tell you what Joe Autera and I tell the clients – “We are not tax accountants and lawyers.” If you offer these services, I would strongly suggest you have someone with knowledge of the tax codes give you an opinion concerning your compliance to the tax code.

Related Articles

An explanation of IRS Code from Cornell University

 IRS Standards on Executive Compensation Fringe Benefits
(Scroll down to Security related transportation)

Tax Code Creates Lethal Vulnerability for Corporate Leaders by Dave Johnson


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