The IRS has extended the exclusion from gross income for identity-protection services provided by employers.
In Announcement 2016-02, the IRS extended the guidance provided in Announcement 2015-22 to include ID-protection services provided to employees or other individuals before a data breach occurs.
In August, the IRS announced that the value of the ID-protection services provided by organizations did not need to be included in the gross income of individuals whose personal information might be compromised in a data breach.
The Treasury Department and the IRS have now extended the exclusion to include ID-protection services to employees or other individuals before a data breach occurs. This announcement does not apply to cash received in lieu of ID-protection services nor to proceeds received under an ID-identity theft insurance policy.
The announcement will appear in IRB 2016-03 on January 19.