I 

111TH CONGRESS 

1ST SESSION H. R. 3580 

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 

SEPTEMBER 16, 2009 

Mr. KING of Iowa (for himself, Mr. BILBRAY, Mrs. BLACKBURN, Mr. 

CULBERSON, Mr. ROHRABACHER, Mr. BURTON of Indiana, Mr. PITTS, 

Mr. GARY G. MILLER of California, Mr. LATTA, Mrs. MYRICK, Mr. 

BRADY of Texas, Mr. LINDER, Mr. FRANKS of Arizona, Mr. POE of 

Texas, Ms. FOXX, Mr. GINGREY of Georgia, Mr. BARTLETT, Mr. BROUN

of Georgia, Mr. MARCHANT, Mr. WAMP, and Mr. ROYCE) 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 

Labor, 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 the ‘‘New IDEA (Illegal 

5 Deduction Elimination Act)’’. 


tjames on DSKG8SOYB1PROD with BILLS
2 

•HR 3580 IH

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 basic pilot program 

23 described in section 403 of the Illegal Immigra24 tion Reform and Immigrant Responsibility Act 

25 of 1996 (8 U.S.C. 1324a note) and obtains con26 firmation of identity and employment eligibility 


tjames on DSKG8SOYB1PROD with BILLS
3 

•HR 3580 IH

1 in compliance with the terms and conditions of 

2 the program with respect to the hiring (or re3 cruitment or referral) of an employee, subpara4 graph (A) shall not apply with respect to wages 

5 paid to such employee.’’. 

6 (b) SIX-YEAR LIMITATION ON ASSESSMENT AND

7 COLLECTION.—Subsection (c) of section 6501 of such 

8 Code (relating to exceptions) is amended by adding at the 

9 end the following new paragraph: 

10 ‘‘(11) DEDUCTION CLAIMED FOR WAGES PAID

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

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

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

14 assessed, or a proceeding in court for the collection 

15 of such tax may be begun without assessment, at 

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

17 (c) USE OF DOCUMENTATION FOR ENFORCEMENT

18 PURPOSES.—Section 274A of the Immigration and Na19 tionality Act (8 U.S.C. 1324a) is amended— 

20 (1) in subparagraph (b)(5), by inserting ‘‘, sec21 tion 162(c)(4) of the Internal Revenue Code of 

22 1986,’’ after ‘‘enforcement of this Act’’; 

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

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

25 1986,’’ after ‘‘enforcement of this Act’’; and 


tjames on DSKG8SOYB1PROD with BILLS
4 

•HR 3580 IH

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

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

3 1986 or’’ after ‘‘or enforcement of’’. 

4 (d) AVAILABILITY OF INFORMATION.— 

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

6 Security, the Secretary of the Department of Home7 land Security, and the Secretary of the Treasury, 

8 shall jointly establish a program to share informa9 tion among such agencies that may or could lead to 

10 the identification of unauthorized aliens (as defined 

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

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

13 information in the earnings suspense file, and any 

14 information in the investigation and enforcement of 

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

16 1986. 

17 (2) DISCLOSURE BY SECRETARY OF THE

18 TREASURY.— 

19 (A) IN GENERAL.—Subsection (i) of sec20 tion 6103 of the Internal Revenue Code of 1986 

21 is amended by adding at the end the following 

22 new paragraph: 

23 ‘‘(9) PAYMENT OF WAGES TO UNAUTHORIZED

24 ALIENS.—Upon request from the Commissioner of 

25 the Social Security Administration or the Secretary 


tjames on DSKG8SOYB1PROD with BILLS
5 

•HR 3580 IH

1 of the Department of Homeland Security, the Sec2 retary shall disclose to officers and employees of 

3 such Administration or Department— 

4 ‘‘(A) taxpayer identity information of em5 ployers who paid wages with respect to which a 

6 deduction was not allowed by reason of section 

7 162(c)(4), and 

8 ‘‘(B) taxpayer identity information of indi9 viduals to whom such wages were paid, 

10 for purposes of carrying out any enforcement activi11 ties of such Administration or Department with re12 spect to such employers or individuals.’’. 

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

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

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

16 matter preceding subparagraph (A) and in17 serting ‘‘(5), (7), or (9)’’, and 

18 (ii) by striking ‘‘(5) or (7)’’ in sub19 paragraph (F)(ii) and inserting ‘‘(5), (7), 

20 or (9)’’. 

21 (e) EFFECTIVE DATE.— 

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

23 Act and the amendments made by this Act shall 

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


tjames on DSKG8SOYB1PROD with BILLS
6 

•HR 3580 IH

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

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

3 December 31, 2007. 

4 SEC. 3. MODIFICATION OF BASIC PILOT PROGRAM FOR EM5 PLOYMENT ELIGIBILITY VERIFICATION. 

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

7 401 of the Illegal Immigration Reform and Immigrant Re8 sponsibility Act of 1996 (8 U.S.C. 1324a note) is amended 

9 by striking the last sentence. 

10 (b) APPLICATION TO CURRENT EMPLOYEES.— 

11 (1) VOLUNTARY ELECTION.—The first sentence 

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

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

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

15 employs any individuals in a State may elect to par16 ticipate in a pilot program.’’. 

17 (2) BENEFIT OF REBUTTABLE PRESUMP18 TION.—Paragraph (1) of section 402(b) of such Act 

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

20 a person or other entity is participating in a pilot 

21 program and obtains confirmation of identity and 

22 employment eligibility in compliance with the terms 

23 and conditions of the program with respect to indi24 viduals employed by the person or entity, the person 

25 or entity has established a rebuttable presumption 


tjames on DSKG8SOYB1PROD with BILLS
7 

•HR 3580 IH

1 that the person or entity has not violated section 

2 274A(a)(2) with respect to such individuals.’’. 

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

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

5 as follows: 

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

7 other entity may provide that the election under 

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

9 which the election is in effect)— 

10 ‘‘(i) to all its hiring (and all recruit11 ment or referral); 

12 ‘‘(ii) to all its hiring (and all recruit13 ment or referral and all individuals em14 ployed by the person or entity); 

15 ‘‘(iii) to all its hiring (and all recruit16 ment or referral) in one or more States or 

17 one or more places of hiring (or recruit18 ment or referral, as the case may be); or 

19 ‘‘(iv) to all its hiring (and all recruit20 ment or referral and all individuals em21 ployed by the person or entity) in one or 

22 more States or one or more place of hiring 

23 (or recruitment or referral or employment, 

24 as the case may be).’’. 


tjames on DSKG8SOYB1PROD with BILLS
8 

•HR 3580 IH

1 (4) PROCEDURES FOR PARTICIPANTS IN BASIC

2 PILOT PROGRAM.—Subsection (a) of section 403 of 

3 such Act is amended— 

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

5 by inserting ‘‘or continued employment in the 

6 United States’’ after ‘‘United States’’; and 

7 (B) in paragraph (3)— 

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

9 all that follows ‘‘(as specified by the Sec10 retary of Homeland Security)’’ and insert11 ing ‘‘after the date of the hiring, or re12 cruitment or referral, in the case of inquir13 ies made pursuant to a hiring, recruitment 

14 or referral (and not of previously hired in15 dividuals).’’; and 

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

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

18 specified period’’. 

19 (c) APPLICATION TO JOB APPLICANTS.—Section 

20 402(c)(2) of such Act is amended by adding at the end 

21 the following: 

22 ‘‘(C) JOB OFFER MAY BE MADE CONDI23 TIONAL ON FINAL CONFIRMATION BY E24 VERIFY.—A person or other entity that elects to 

25 participate in the basic pilot program described 


tjames on DSKG8SOYB1PROD with BILLS
9 

•HR 3580 IH

1 in section 403(a) (known as the ‘E-Verify pro2 gram’) may offer a prospective employee an em3 ployment position conditioned on final 

4 verification of the identity and employment eli5 gibility of the employee using the employment 

6 eligibility confirmation system established under 

7 section 404.’’. 

Æ 


tjames on DSKG8SOYB1PROD with BILLS