Ransomware attack payments might be tax deductible, says US government

WASHINGTON - As ransomware attacks surge, the FBI is doubling down on its guidance to affected businesses: Don’t pay the cybercriminals. But the U.S. government also offers a little-noticed incentive for those who do pay: The ransoms may be tax deductible.

The IRS offers no formal guidance on ransomware payments, but multiple tax experts interviewed by The Associated Press said deductions are usually allowed under law and established guidance. It’s a "silver lining" to ransomware victims, as some tax lawyers have said.

A laptop displays a message after being infected by a ransomware as part of a worldwide cyberattack on June 27, 2017 in Geldrop. The unprecedented global ransomware cyberattack has hit more than 200,000 victims in more than 150 countries, Europol exe

But those looking to discourage payments are less sanguine. They fear the deduction is a problematic incentive that could entice businesses to pay ransoms against the advice of law enforcement. At a minimum, they say, the deductibility sends a discordant message to businesses under duress.

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