I 
109TH CONGRESS 
1ST SESSION H. R. 3095 
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 
JUNE 28, 2005 
Mr. KING of Iowa (for himself, Mr. SHAW, Mr. SMITH of Texas, Mr. 
HOSTETTLER, Mr. GALLEGLY, Mr. CALVERT, Mr. INGLIS of South Caro-
lina, Mr. HAYWORTH, Mr. GOHMERT, Mr. FRANKS of Arizona, Mr. NOR-
WOOD, Mr. LEWIS of Kentucky, Mr. BEAUPREZ, Mr. BACHUS, Mr. 
PENCE, Mr. LINDER, Mr. SENSENBRENNER, and Mr. GOODLATTE) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to clarify 
that wages paid to unauthorized aliens may not be de-
ducted from gross income, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘New IDEA (Illegal 
Deduction Elimination Act)’’.
SEC. 2. CLARIFICATION THAT WAGES PAID TO UNAUTHOR-
IZED 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 
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 basic pilot 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) 6-YEAR LIMITATION ON ASSESSMENT AND COL-
LECTION.—Subsection (c) of section 6501 of such Code 
(relating to exceptions) is amended by adding at the end 
the following new paragraph: 
‘‘(10) 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 Illegal Immigration Re-
form and Immigrant Responsibility Act of 1996 is amend-
ed— 
(1) in subparagraph (b)(5), by inserting ‘‘, sec-
tion 162(c)(4) of the Internal Revenue Code of 
1986,’’ after ‘‘enforcement of this chapter’’;
(2) in subparagraph (d)(2)(F), by inserting ‘‘, 
section 162(c)(4) of the Internal Revenue Code of 
1986,’’ after ‘‘enforcement of this chapter’’; 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.—The Commis-
sioner of Social Security shall make available to the Com-
missioner of Internal Revenue any information related to 
the investigation and enforcement of section 162(c)(4) of 
the Internal Revenue Code of 1986, including any no- 
match letter and any information in the suspense earnings 
file. 
(e) EFFECTIVE DATE.— 
(1) Except as provided in paragraph (2), this 
Act and the amendments made by this Act shall 
take effect on the date of the enactment of this Act. 
(2) The amendments made by subsections (a) 
and (b) shall apply to taxable years beginning after 
December 31, 2005. 
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