‘‘(h) PENALTY STRUCTURE WITH RESPECT TO EM-
PLOYING
AN ALIEN NOT AUTHORIZED TO BE EM-
PLOYED.—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-
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 
$15,000
The third and subsequent offenses .........................
$25,000 
$50,000.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to failures occurring after the date 
of the enactment of this Act. 
SEC. 6. CLARIFICATION THAT WAGES PAID TO UNAUTHOR-
IZED ALIENS MAY NOT BE DEDUCTED FROM 
GROSS INCOME. 
(a) DENIAL OF DEDUCTION.—Subsection (c) of sec-
tion 162 of the Internal Revenue Code of 1986 (relating 
to illegal bribes, kickbacks, and other payments) is amend-
ed 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-
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srobinson on DSKHWCL6B1PROD with BILLS
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 remunera-
tion 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) 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: 
‘‘(12) DEDUCTION CLAIMED FOR WAGES PAID 
TO UNAUTHORIZED ALIENS.—In the case of a return 
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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 
the identification of unauthorized aliens (as defined 
under section 274A(h)(3) of the Immigration and 
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srobinson on DSKHWCL6B1PROD with BILLS
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-
poses of carrying out any enforcement activities 
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srobinson on DSKHWCL6B1PROD with BILLS
of such Administration or Department with re-
spect to such employers or individuals.’’. 
(B) RECORDKEEPING.—Paragraph (4) of 
section 6103(p) of such Code is amended— 
(i) by striking ‘‘(5), or (7)’’ in the 
matter preceding subparagraph (A) and in-
serting ‘‘(5), (7), or (9)’’, and 
(ii) by striking ‘‘(5) or (7)’’ in sub-
paragraph (F)(ii) and inserting ‘‘(5), (7), 
or (9)’’. 
(e) EFFECTIVE DATE.— 
(1) DENIAL OF DEDUCTION.—The amendment 
made by subsection (a) shall apply to amounts paid 
or incurred in taxable years beginning after Decem-
ber 31, 2010. 
(2) SIX-YEAR LIMITATION ON ASSESSMENT AND 
COLLECTION.—The amendment made by subsection 
(b) shall apply with respect to returns for taxable 
years beginning after December 31, 2010. 
(3) USE OF DOCUMENTATION FOR ENFORCE-
MENT PURPOSES.—The amendments made by sub-
section (c) shall take effect on the date of the enact-
ment of this Act. 
(4) 
AVAILABILITY
OF
INFORMATION.—The 
amendments made by subsection (d) shall apply with 
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respect to requests made for taxable years beginning 
after December 31, 2010. 
Æ 
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