Publication
Legal Alert – Identity Theft Protection Services – Federal Income Tax Treatment
by William A. Kastin, Carlene Y. Lowry and Patrick X. Fowler
I. Executive Summary
The Treasury Department and the IRS are sensitive to the data security problems facing organizations, their employees and their customers and, as a result, have provided some welcomed taxpayer-favorable assistance. Specifically, the IRS will not assert that an individual must include in gross income the value of identity protection services provided by an organization to which the individual provided personal information (e.g., name, social security number (SSNs), or banking or credit account numbers), nor will the IRS assert that the value of such services must be included as wages or is otherwise reportable on an IRS Form W-2 or 1099-MISC.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 16 locations throughout the United States and in Mexico, including Los Angeles, Orange County and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
