While the Internal Revenue Service can often strike fear in the hearts of American citizens as they prepare for tax season, the IRS is not always focused just on collecting taxes. The IRS regularly endeavors to make tax season that much easier for U.S. citizens by discussing ways the tax code needs to be adapted in the modern world. By keeping the tax code up to date based on changing modern society, the IRS is endeavoring to ease the tax burden on everyday citizens and ensure that everyone pays a fair portion.
As a part of this, the IRS recently announced new policy related to the taxing of victims of identity theft. Previously, services employed to protect someone’s identity from thieves hoping to access their financial data were considered a regular expense for consumers. Money spent on protecting one’s finances could not be counted as a necessary business expense and used as a deduction or credit.
Now however, the IRS allows companies to include the cost of protecting their employees from identity theft as a part of their regular business expenses and the service can be deducted as a part of the employee’s gross income and wages.
This policy comes in recognition of modern age costs of doing business. Sensitive personal data is regularly stored digitally as a way of expediting work and reducing costs related to recording hard information on paper and filing it. This data is vulnerable to hacking attempts, and companies have to constantly update their security measures to make sure the data of their customers stays safe.
By recognizing the necessity of digital protection, the IRS has shown its willingness to grow and adapt alongside companies, reflecting the IRS’s own growth in the Digital Age.<!- mfunc feat_school ->