Identity theft has impacted millions of individuals in the past year, with hacks of sensitive information held by stores, insurers, and government offices – including the IRS.
Corporations and agencies often offer free credit monitoring services to those customers or employees who have had their personal data exposed. There is a value associated with those services that could be considered taxable compensation to the victims. However, on June 1, 2015, the IRS clarified ID theft monitoring services provided to victims would not be treated as taxable income. It was also confirmed that agencies offering monitoring services to their customers or employees would not be required to report the value of those services, either a W-2 or 1099-MISC, when it is provided to victims of a security compromise.
For more information, contact us at 703.385.8888 or firstname.lastname@example.org.