Ransomware attacks are on the rise in the United States. At the same time, while the FBI has become more stringent in instructing affected companies not to pay cybercriminals, the US government is offering less incentive to those who pay: the ransom may be tax-deductible. That Associated Press reports.
In ransomware attacks, criminals extort companies by installing ransomware on their computers. Computers and the data on them are blocked and the user is asked for money to “free” the computer back via a code that is provided for a fee.
Many tax experts say the IRS allows ransom payments to be deducted News agency. The discount for digital extortion would be legal and generally accepted advice. Officially, the IRS does not provide guidance on ransom payments.
Ransomware has become a multi-billion dollar company in the US, and the average repayment last year was more than $310,000, up 171% from 2019. Deductibility is part of a larger dilemma for the US government. The government does not want to legally subsidize payments to criminal gangs or encourage more attacks. But companies’ failure to pay can have serious consequences for businesses and possibly the economy in general.
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