New York Times DealBook: For Some Corporate Chiefs, Private Security Is a Tax Break, by Steven M. Davidoff (Ohio State):

Dozens of corporate boards … insist or recommend that their top executives fly on private jets for security reasons. In the name of security, companies also pay for home alarm systems, 24-hour monitoring and even chauffeurs. …

Are corporate chieftains really in that much danger? The answer has to be no in most cases. … Rather, directors often dole out personal safety perks to ease a chief executive’s tax bill. By classifying the benefits as security measures, the executives typically get a better tax treatment on the services. It’s a common corporate tax trick. …

Let’s say you are a chief executive who wants to take the company’s jet. If the trip is business related, then it’s all pretty straightforward. The company pays for it and deducts the expense under a complicated formula. It’s a different case for personal travel. In those cases, chief executives are required to pay income tax on the imputed portion of the flight — that is, the amount the company paid for the flight. So a chief executive who is a frequent flier can rack up a rather large tax bill. Luckily, the tax code offers executives a break. If an outside security consultant determines that executives need a private jet and other services for their safety, the IRS cuts corporate chieftains a break. In such cases, the chief executive will pay a reduced tax bill or sometimes no tax at all. Even when tax is due, the company sometimes takes care of it.