Ransomware Payments Can Now Be Deducted From Your Tax – Government Response to Ransomware Attacks
The Federal Bureau of Investigation (FBI) has strongly suggested that companies affected by ransomware attacks should never give money to their attackers.
However, the US government offered an incentive to victims who gave in to cybercriminals’ bargaining – the ransoms could be tax deductible.
Should you pay ransomware payments?
According to Gazette Journal, the Interal Revenue Service (IRS) does not offer any formal guidelines regarding ransomware payments. Corn many tax experts have said that deductions might be possible because they are permitted by law and established guidelines.
Tax lawyers and accountants claimed it was a silver liner offered to victims of ransomware.
However, those who have argued that victims should not pay for ransomware are less optimistic. Journal Gazette has indicated that they are concerned that the tax deduction will become a problematic incentive that would force companies to pay the ransom despite the ban by law enforcement.
The slightest damage the deduction could bring is a jarring message to various companies under duress.
The problem with the ransomware tax deduction
New York Rep. John Katko mentioned that the concept of paying a ransom and having it deducted from a company’s tax is a bit inconsistent.
By touching on tax deductibility, a greater difficulty will be affected.
This was due to the increase in ransomware attacks which continued to hurt the economy. Cybercriminals to have stole a lot of personal data, and demanded money in exchange for unlocking the files.
The government does not want to tolerate any positive reinforcement of criminal groups that could potentially fund their operations. But if a business does not pay the ransom, it could face devastating consequences and the entire economy could be severely affected.
Also Read: Cybersecurity: REvil Ransomware Gang Strikes Again and Attacks FCUK Fashion Label
Biggest ransomware attacks in 2021
Previous ransomware attacks have already proven effective in hurting the economy.
For example, the ransomware attack on the Colonial Pipeline in May resulted in gas shortages in parts of the United States as citizens decided to accumulate as much fuel as they could buy when they found out. that the company had been attacked.
Colonial Pipeline is responsible for transporting 45% of the fuel the East Coast consumes, and it had no choice but to pay 75 Bitcoins to its attackers, which totaled $ 4.4 million at the time.
Another attack occurred on JBS, the world’s largest meat processing supplier, where attackers threatened to disrupt its food supply. As a remedy, the company gave in to the ransomware gang and paid $ 11 million.
Should ransomware payments be tax deductible?
According to an expert presented by Journal Gazette, companies that give in to ransomware demands from their attackers deserve to claim tax deductions. And because most businesses can deduct losses from other crimes like embezzlement and robbery, experts have suggested that ransomware payments should also be valid.
However, it could give ransomware gangs the false impression that they can get away with it because the government seems to tolerate it.
Related article: Clop Gang Ransomware Operations Resume After Recent Arrests – New Data Breach Victims
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Written by Fran Sanders
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