Add protection against data theft to the growing list of benefits that employers can offer to their employees on a tax-free basis. And it doesn’t matter whether a breach has occurred or may yet occur, according to recent guidance from the IRS.
Employers can give workers identity protection benefits on a tax-free basis, even if those services are provided prior to a data breach, the Internal Revenue Service said Dec. 30, 2015, in Announcement 2016-2.
That means that employers don’t have to include the value of the protection services in employee income or even report the value to the government and employees aren’t taxed on that value.
This announcement was preceded by Announcement 2015-22, released in August, in which the IRS provided tax relief for identity protection services provided after an identity breach. The IRS said in that document that organizations can provide identity protection services at no cost to customers, employees and others after a data breach, as a way of preventing and mitigating possible identity theft losses.
Meanwhile, federal agencies are stepping up in their efforts to deal with the fallout from data breaches affecting their employees and customers.
In a Dec. 11, 2015, Office of Personnel Management announcement, the agency said it has concluded initial mailings to 93 percent of 21.5 million persons affected by its July 2015 background check data breach. As a result of the breach, OPM has offered affected persons, including their children under the age of 18 as of July 1, 2015, cost-free credit monitoring and identity theft protection and insurance for a three-year period.
Moreover, in May 2015, after having experienced an identity theft breach in its “Get Transcript” application, the IRS offered to provide identity protection services to approximately 100,000 taxpayers, according to the IRS document, “IRS Statement on the ‘Get Transcript’ Application.”
“The IRS will be working aggressively to protect affected taxpayers and strengthen our protocols even further going forward,” IRS said in the document.
Design benefit plans and respond quickly and confidently to a range of compliance issues, with a free trial to the Benefits Practice Resource Center.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)