tion, require States to record and retain electronic 
records of pertinent identification information col-
lected from requestors who are not the registrants. 
(9) Not later than 6 months after the date of 
the enactment of this Act, submit to Congress a re-
port on whether there is a need for Federal laws to 
address penalties for fraud and misuse of vital 
records and whether violations are sufficiently en-
forced. 
SEC. 205. PENALTY FOR FAILURE TO FILE CORRECT INFOR-
MATION RETURNS. 
(a) IN GENERAL.—Section 6721 of the Internal Rev-
enue Code of 1986 (26 U.S.C. 6721) is amended by add-
ing at the end the following: 
‘‘(g) MOST EGREGIOUS NONCOMPLIANT EMPLOY-
ERS.—The Secretary shall assess the maximum allowable 
penalties on 100 percent of the employers designated in 
any tax year by the Social Security Administration as the 
most egregious noncompliant employers. 
‘‘(h) EMPLOYMENT OF ALIEN NOT AUTHORIZED TO 
BE EMPLOYED.—Notwithstanding any other provision in 
this section, in the case of a failure described in subsection 
(a)(2) with respect to any person employing an alien not 
authorized to be so employed, the penalty under this sec-
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smartinez on DSK6TPTVN1PROD with BILLS
tion shall be determined in accordance with the following 
table: 
‘‘In the case of— 
Not less than— 
Not more than— 
The first offense .............
$2,500 ...........................
$5,000 
The second offense .........
$7,500 ...........................
$10,000 
The third offense ............
$25,000 .........................
$40,000.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to with respect to information 
returns required to be filed for years beginning after De-
cember 31, 2012. 
SEC. 206. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums 
as may be required to carry out this subtitle. 
Subtitle B—Nondeductibility of 
Wages Paid to Unauthorized Aliens 
SEC. 211. CLARIFICATION THAT WAGES PAID TO UNAU-
THORIZED ALIENS MAY NOT BE DEDUCTED 
FROM GROSS INCOME. 
(a) IN GENERAL.—Subsection (c) of section 162 of 
the Internal Revenue Code of 1986 (relating to illegal 
bribes, kickbacks, and other payments) is amended by 
adding at the end the following new paragraph: 
‘‘(4) WAGES PAID TO OR ON BEHALF OF UNAU-
THORIZED ALIENS.— 
‘‘(A) IN GENERAL.—No deduction shall be 
allowed under subsection (a) for any wage paid 
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to or on behalf of an unauthorized alien, as de-
fined under section 274A(h)(3) of the Immigra-
tion 
and 
Nationality 
Act 
(8 
U.S.C. 
1324a(h)(3)). 
‘‘(B) WAGES.—For the purposes of this 
paragraph, the term ‘wages’ means all remu-
neration for employment, including the cash 
value of all remuneration (including benefits) 
paid in any medium other than cash. 
‘‘(C) SAFE HARBOR.—If a person or other 
entity is participating in the E-Verify Program 
described in section 403 of the Illegal Immigra-
tion Reform and Immigrant Responsibility Act 
of 1996 (8 U.S.C. 1324a note) and obtains con-
firmation of identity and employment eligibility 
in compliance with the terms and conditions of 
the program with respect to the hiring (or re-
cruitment or referral) of an employee, subpara-
graph (A) shall not apply with respect to wages 
paid to such employee.’’. 
(b) SIX-YEAR LIMITATION
ON ASSESSMENT
AND 
COLLECTION.—Subsection (c) of section 6501 of such 
Code (relating to exceptions) is amended by adding at the 
end the following new paragraph: 
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‘‘(12) DEDUCTION CLAIMED FOR WAGES PAID 
TO UNAUTHORIZED ALIENS.—In the case of a return 
of tax on which a deduction is shown in violation of 
section 162(c)(4), any tax under chapter 1 may be 
assessed, or a proceeding in court for the collection 
of such tax may be begun without assessment, at 
any time within 6 years after the return was filed.’’. 
(c) USE OF DOCUMENTATION FOR ENFORCEMENT 
PURPOSES.—Section 274A of the Immigration and Na-
tionality Act (8 U.S.C. 1324a) is amended— 
(1) in subparagraph (b)(5), by inserting ‘‘, sec-
tion 162(c)(4) of the Internal Revenue Code of 
1986,’’ after ‘‘enforcement of this Act’’; 
(2) in subparagraph (d)(2)(F), by inserting ‘‘, 
section 162(c)(4) of the Internal Revenue Code of 
1986,’’ after ‘‘enforcement of this Act’’; and 
(3) in subparagraph (d)(2)(G), by inserting 
‘‘section 162(c)(4) of the Internal Revenue Code of 
1986 or’’ after ‘‘or enforcement of’’. 
(d) AVAILABILITY OF INFORMATION.— 
(1) IN GENERAL.—The Commissioner of Social 
Security, the Secretary of the Department of Home-
land Security, and the Secretary of the Treasury, 
shall jointly establish a program to share informa-
tion among such agencies that may or could lead to 
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the identification of unauthorized aliens (as defined 
under section 274A(h)(3) of the Immigration and 
Nationality Act), including any no-match letter, any 
information in the earnings suspense file, and any 
information in the investigation and enforcement of 
section 162(c)(4) of the Internal Revenue Code of 
1986. 
(2) DISCLOSURE
BY
SECRETARY
OF
THE 
TREASURY.— 
(A) IN GENERAL.—Subsection (i) of sec-
tion 6103 of the Internal Revenue Code of 1986 
is amended by adding at the end the following 
new paragraph: 
‘‘(9) PAYMENT OF WAGES TO UNAUTHORIZED 
ALIENS.—Upon request from the Commissioner of 
the Social Security Administration or the Secretary 
of the Department of Homeland Security, the Sec-
retary shall disclose to officers and employees of 
such Administration or Department— 
‘‘(A) taxpayer identity information of em-
ployers who paid wages with respect to which a 
deduction was not allowed by reason of section 
162(c)(4), and 
‘‘(B) taxpayer identity information of indi-
viduals to whom such wages were paid, for pur-
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