I 

114TH CONGRESS 

1ST SESSION H. R. 841 

To amend the Internal Revenue Code of 1986 to clarify that wages paid 

to unauthorized aliens may not be deducted from gross income, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 10, 2015 

Mr. KING of Iowa (for himself, Mr. DUNCAN of South Carolina, Mr. JONES, 

and Mr. BARLETTA) introduced the following bill; which was referred to 

the Committee on Ways and Means, and in addition to the Committees 

on the Judiciary and Education and the Workforce, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to clarify 

that wages paid to unauthorized aliens may not be deducted from gross income, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as— 

5 (1) the ‘‘New IDEA Act’’; or 

6 (2) the ‘‘New Illegal Deduction Elimination 

7 Act’’. 


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1 SEC. 2. CLARIFICATION THAT WAGES PAID TO UNAUTHOR2 IZED ALIENS MAY NOT BE DEDUCTED FROM 

3 GROSS INCOME. 

4 (a) IN GENERAL.—Subsection (c) of section 162 of 

5 the Internal Revenue Code of 1986 (relating to illegal 

6 bribes, kickbacks, and other payments) is amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(4) WAGES PAID TO OR ON BEHALF OF UNAU9 THORIZED ALIENS.— 

10 ‘‘(A) IN GENERAL.—No deduction shall be 

11 allowed under subsection (a) for any wage paid 

12 to or on behalf of an unauthorized alien, as de13 fined under section 274A(h)(3) of the Immigra14 tion and Nationality Act (8 U.S.C. 

15 1324a(h)(3)). 

16 ‘‘(B) WAGES.—For the purposes of this 

17 paragraph, the term ‘wages’ means all remu18 neration for employment, including the cash 

19 value of all remuneration (including benefits) 

20 paid in any medium other than cash. 

21 ‘‘(C) SAFE HARBOR.—If a person or other 

22 entity is participating in the E-Verify Program 

23 described in section 403(a) of the Illegal Immi24 gration Reform and Immigrant Responsibility 

25 Act of 1996 (8 U.S.C. 1324a note) and obtains 

26 confirmation of identity and employment eligiVerDate Sep 11 2014 05:01 Feb 18, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H841.IH H841

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1 bility in compliance with the terms and condi2 tions of the program with respect to the hiring 

3 (or recruitment or referral) of an employee, 

4 subparagraph (A) shall not apply with respect 

5 to wages paid to such employee. 

6 ‘‘(D) BURDEN OF PROOF.—In the case of 

7 any examination of a return in connection with 

8 a deduction under this section by reason of this 

9 paragraph, the Secretary shall bear the burden 

10 of proving that wages were paid to or on behalf 

11 of an unauthorized alien. 

12 ‘‘(E) LIMITATION ON TAXPAYER AUDIT.— 

13 The Secretary may not commence an audit or 

14 other investigation of a taxpayer solely on the 

15 basis of a deduction taken under this section by 

16 reason of this paragraph.’’. 

17 (b) SIX-YEAR LIMITATION ON ASSESSMENT AND

18 COLLECTION.—Subsection (c) of section 6501 of the In19 ternal Revenue Code of 1986 (relating to exceptions) is 

20 amended by adding at the end the following new para21 graph: 

22 ‘‘(12) DEDUCTION CLAIMED FOR WAGES PAID

23 TO UNAUTHORIZED ALIENS.—In the case of a return 

24 of tax on which a deduction is shown in violation of 

25 section 162(c)(4), any tax under chapter 1 may be 


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1 assessed, or a proceeding in court for the collection 

2 of such tax may be begun without assessment, at 

3 any time within 6 years after the return was filed.’’. 

4 (c) USE OF DOCUMENTATION FOR ENFORCEMENT

5 PURPOSES.—Section 274A of the Immigration and Na6 tionality Act (8 U.S.C. 1324a) is amended— 

7 (1) in subparagraph (b)(5), by inserting ‘‘, sec8 tion 162(c)(4) of the Internal Revenue Code of 

9 1986,’’ after ‘‘enforcement of this Act’’; 

10 (2) in subparagraph (d)(2)(F), by inserting ‘‘, 

11 section 162(c)(4) of the Internal Revenue Code of 

12 1986,’’ after ‘‘enforcement of this Act’’; and 

13 (3) in subparagraph (d)(2)(G), by inserting 

14 ‘‘section 162(c)(4) of the Internal Revenue Code of 

15 1986 or’’ after ‘‘or enforcement of’’. 

16 (d) AVAILABILITY OF INFORMATION.— 

17 (1) IN GENERAL.—The Commissioner of Social 

18 Security, the Secretary of the Department of Home19 land Security, and the Secretary of the Treasury, 

20 shall jointly establish a program to share informa21 tion among such agencies that may or could lead to 

22 the identification of unauthorized aliens (as defined 

23 under section 274A(h)(3) of the Immigration and 

24 Nationality Act), including any no-match letter, any 

25 information in the earnings suspense file, and any 


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1 information in the investigation and enforcement of 

2 section 162(c)(4) of the Internal Revenue Code of 

3 1986. 

4 (2) DISCLOSURE BY SECRETARY OF THE

5 TREASURY.— 

6 (A) IN GENERAL.—Subsection (i) of sec7 tion 6103 of the Internal Revenue Code of 1986 

8 is amended by adding at the end the following 

9 new paragraph: 

10 ‘‘(9) PAYMENT OF WAGES TO UNAUTHORIZED

11 ALIENS.—Upon request from the Commissioner of 

12 the Social Security Administration or the Secretary 

13 of the Department of Homeland Security, the Sec14 retary shall disclose to officers and employees of 

15 such Administration or Department— 

16 ‘‘(A) taxpayer identity information of em17 ployers who paid wages with respect to which a 

18 deduction was not allowed by reason of section 

19 162(c)(4), and 

20 ‘‘(B) taxpayer identity information of indi21 viduals to whom such wages were paid, 

22 for purposes of carrying out any enforcement activi23 ties of such Administration or Department with re24 spect to such employers or individuals.’’. 


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1 (B) RECORDKEEPING.—Paragraph (4) of 

2 section 6103(p) of such Code is amended— 

3 (i) by striking ‘‘(5), or (7)’’ in the 

4 matter preceding subparagraph (A) and in5 serting ‘‘(5), (7), or (9)’’, and 

6 (ii) by striking ‘‘(5) or (7)’’ in sub7 paragraph (F)(ii) and inserting ‘‘(5), (7), 

8 or (9)’’. 

9 (e) EFFECTIVE DATE.— 

10 (1) Except as provided in paragraph (2), this 

11 Act and the amendments made by this Act shall 

12 take effect on the date of the enactment of this Act. 

13 (2) The amendments made by subsections (a) 

14 and (b) shall apply to taxable years beginning after 

15 December 31, 2015. 

16 SEC. 3. MODIFICATION OF E-VERIFY PROGRAM. 

17 (a) MAKING PERMANENT.—Subsection (b) of section 

18 401 of the Illegal Immigration Reform and Immigrant Re19 sponsibility Act of 1996 (8 U.S.C. 1324a note) is amended 

20 by striking the last sentence. 

21 (b) APPLICATION TO CURRENT EMPLOYEES.— 

22 (1) VOLUNTARY ELECTION.—The first sentence 

23 of section 402(a) of such Act is amended to read as 

24 follows: ‘‘Any person or other entity that conducts 

25 any hiring (or recruitment or referral) in a State or 


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1 employs any individuals in a State may elect to par2 ticipate in the E-Verify Program.’’. 

3 (2) BENEFIT OF REBUTTABLE PRESUMP4 TION.—Paragraph (1) of section 402(b) of such Act 

5 is amended by adding at the end the following: ‘‘If 

6 a person or other entity is participating in the E7 Verify Program and obtains confirmation of identity 

8 and employment eligibility in compliance with the 

9 terms and conditions of the program with respect to 

10 individuals employed by the person or entity, the 

11 person or entity has established a rebuttable pre12 sumption that the person or entity has not violated 

13 section 274A(a)(2) with respect to such individ14 uals.’’. 

15 (3) SCOPE OF ELECTION.—Subparagraph (A) 

16 of section 402(c)(2) of such Act is amended to read 

17 as follows: 

18 ‘‘(A) IN GENERAL.—Any electing person or 

19 other entity may provide that the election under 

20 subsection (a) shall apply (during the period in 

21 which the election is in effect)— 

22 ‘‘(i) to all its hiring (and all recruit23 ment or referral); 


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1 ‘‘(ii) to all its hiring (and all recruit2 ment or referral and all individuals em3 ployed by the person or entity); 

4 ‘‘(iii) to all its hiring (and all recruit5 ment or referral) in one or more States or 

6 one or more places of hiring (or recruit7 ment or referral, as the case may be); or 

8 ‘‘(iv) to all its hiring (and all recruit9 ment or referral and all individuals em10 ployed by the person or entity) in one or 

11 more States or one or more place of hiring 

12 (or recruitment or referral or employment, 

13 as the case may be).’’. 

14 (4) PROCEDURES FOR PARTICIPANTS IN E15 VERIFY PROGRAM.—Subsection (a) of section 403 of 

16 such Act is amended— 

17 (A) in the matter preceding paragraph (1), 

18 by inserting ‘‘or continued employment in the 

19 United States’’ after ‘‘United States’’; and 

20 (B) in paragraph (3)— 

21 (i) in subparagraph (A), by striking 

22 all that follows ‘‘(as specified by the Sec23 retary of Homeland Security)’’ and insert24 ing ‘‘after the date of the hiring, or re25 cruitment or referral, in the case of inquirVerDate Sep 11 2014 05:01 Feb 18, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H841.IH H841

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1 ies made pursuant to a hiring, recruitment 

2 or referral (and not of previously hired in3 dividuals).’’; and 

4 (ii) in subparagraph (B), by striking 

5 ‘‘such 3 working days’’ and inserting ‘‘the 

6 specified period’’. 

7 (c) APPLICATION TO JOB APPLICANTS.—Section 

8 402(c)(2) of such Act is amended by adding at the end 

9 the following: 

10 ‘‘(C) JOB OFFER MAY BE MADE CONDI11 TIONAL ON FINAL CONFIRMATION BY E12 VERIFY.—A person or other entity that elects to 

13 participate in the E-Verify Program may offer 

14 a prospective employee an employment position 

15 conditioned on final verification of the identity 

16 and employment eligibility of the employee 

17 using the employment eligibility confirmation 

18 system established under section 404.’’. 

Æ 


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