H.R. 2692

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2692 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 2692

To amend the Internal Revenue Code of 1986 to end the tax subsidy for 
employer efforts to influence their workers' exercise of their rights 
around labor organizations and engaging in collective action.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 7, 2025

Mr. Norcross (for himself, Mr. Boyle of Pennsylvania, Ms. Chu, Mr. 
Smith of Washington, Mr. Green of Texas, Ms. Ocasio-Cortez, Ms. Adams, 
Ms. Craig, Mrs. McClain Delaney, Ms. Balint, Ms. McCollum, Mr. Foster, 
Mr. Sherman, Mr. Schneider, Ms. Pingree, Mr. Deluzio, Ms. Houlahan, Mr. 
Garcia of Illinois, Mr. Goldman of New York, Mr. Davis of Illinois, Mr. 
Soto, Mrs. Dingell, Ms. Wasserman Schultz, Mrs. Ramirez, Ms. DeGette, 
Ms. Titus, Mr. Evans of Pennsylvania, Ms. Norton, Mr. Cleaver, Mrs. 
Sykes, Mr. Sorensen, Mr. Mrvan, Mr. Pallone, Ms. Wilson of Florida, Mr. 
Latimer, Mr. Connolly, Mr. Cisneros, Ms. Meng, Mr. Casar, Ms. Stevens, 
Mr. Johnson of Georgia, Mr. Cuellar, Mr. Conaway, Ms. Omar, Mrs. Hayes, 
Ms. Schakowsky, Mr. Golden of Maine, Mr. Nadler, Ms. Tokuda, Mr. 
McGovern, Mr. Gomez, Mr. Panetta, Mr. Neguse, Mr. Larson of 
Connecticut, Mr. Garamendi, Mr. Mannion, Mr. Olszewski, Mr. Gottheimer, 
Mrs. Beatty, Ms. Brownley, Ms. Morrison, Mr. Mullin, Ms. Schrier, Ms. 
McDonald Rivet, Mr. Mfume, Mrs. McIver, Ms. Friedman, Ms. Underwood, 
Ms. Sanchez, Mrs. Fletcher, Mr. Doggett, Ms. Lois Frankel of Florida, 
Mrs. Trahan, Mrs. McBath, Ms. Dean of Pennsylvania, Mr. Veasey, Ms. 
Kaptur, Mr. DeSaulnier, Mr. Pocan, Mr. Takano, Ms. Scanlon, Ms. Dexter, 
Ms. Waters, Mr. Frost, Ms. Stansbury, Mr. Quigley, Ms. Sherrill, Mr. 
McGarvey, Ms. Barragan, Ms. Williams of Georgia, Ms. Budzinski, Ms. 
Velazquez, Mr. Ryan, Mr. Tonko, Ms. Jayapal, Mr. Krishnamoorthi, Ms. 
Tlaib, Mr. Larsen of Washington, Mr. Torres of New York, Mr. Khanna, 
Mr. Garcia of California, Mr. Menendez, Ms. DeLauro, Mr. Bishop, Ms. 
Elfreth, Ms. McBride, Mr. Casten, Mr. Magaziner, Mr. Moulton, Ms. 
Davids of Kansas, Ms. Brown, Mr. Thanedar, Mr. Lynch, Mr. Horsford, Ms. 
Lee of Pennsylvania, Ms. DelBene, Ms. Bonamici, Ms. Garcia of Texas, 
Mr. Lieu, Mr. Suozzi, Mr. Carter of Louisiana, Ms. Hoyle of Oregon, Ms. 
Ansari, Ms. Clarke of New York, Mr. Kennedy of New York, and Mr. Crow) 
introduced the following bill; which was referred to the Committee on 
Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to end the tax subsidy for 
employer efforts to influence their workers' exercise of their rights 
around labor organizations and engaging in collective action.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``No Tax Breaks for Union Busting 
(NTBUB) Act''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) The National Labor Relations Act (29 U.S.C. 151 et 
seq.) declares that it is the right of employees to form, join, 
or assist labor organizations.
(2) The National Labor Relations Act further declares that 
it is ``the policy of the United States to eliminate the causes 
of certain substantial obstructions to the free flow of 
commerce and to mitigate and eliminate these obstructions when 
they have occurred by encouraging the practice and procedure of 
collective bargaining and by protecting the exercise by workers 
of full freedom of association, self-organization, and 
designation of representatives of their own choosing . . .''.
(3) Despite Congress' intention to give workers full agency 
in these matters, many employers regularly choose to involve 
themselves, lawfully or unlawfully, in the decisions of their 
employees about whether to avail themselves of their rights 
under the National Labor Relations Act and the Railway Labor 
Act (45 U.S.C. 151 et seq.).
(4) Employers frequently violate labor laws around 
organizing and collective action. The Economic Policy Institute 
finds that in approximately 4 of 10 labor organization 
elections in 2016-2017 employers were charged with committing 
an unfair labor practice. Among larger bargaining units of 61 
employees or more, over 54 percent of elections have an unfair 
labor practice charge.
(5) In practice, these unfair labor practices often include 
charges such as employees being illegally fired for labor 
organization activity, refusal to bargain in good faith with 
labor organizations, or coercion and intimidation. Employers 
also frequently use captive audience meetings, workplace 
surveillance, and other lawful or unlawful tactics to sway 
labor organization elections.
(6) Whether or not there are charges of unlawful behavior, 
employers spend millions of dollars to sway the opinions of 
their employees with respect to whether or how to exercise 
their rights under the National Labor Relations Act and the 
Railway Labor Act. According to the Economic Policy Institute, 
companies spent $340,000,000 yearly on outside consultants to 
sway their workers' opinions about labor organization 
activities. This and other spending interferes with the United 
States goal of ``encouraging the practice and procedure of 
collective bargaining''.
(7) The Internal Revenue Code of 1986 has long recognized 
that spending by businesses with the purpose of influencing the 
general public with respect to elections, while it may be 
lawful, is not tax deductible. Congress should extend that 
principle to spending done by employers to influence workers' 
elections and collective bargaining decisions. These free 
choices to exercise the rights to engage in collective 
bargaining, labor organization representation, and other lawful 
collective activities should be made without taxpayer subsidies 
of undue outside influence from employers.

SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO INFLUENCE EMPLOYEES WITH 
RESPECT TO LABOR ORGANIZATIONS OR LABOR ORGANIZATION 
ACTIVITIES.

(a) In General.--Section 162(e)(1) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of subparagraph (C), by 
striking the period at the end of subparagraph (D) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
``(E) any attempt to influence the taxpayer's 
employees with respect to labor organizations or labor 
organization activities, including with respect to the 
opinion of such employees regarding such organizations 
or activities.''.
(b) Labor Organizations; Labor Organization Activities Defined.--
Section 162(e) of the Internal Revenue Code of 1986 is amended by 
redesignating paragraph (6) as paragraph (7) and by inserting after 
paragraph (5) the following new paragraph:
``(6) Labor organizations and labor organization activity 
defined.--For purposes of this subsection--
``(A) Labor organization.--The term `labor 
organization' has the meaning given such term in 
section 3 of the Labor-Management Reporting and 
Disclosure Act of 1959 (29 U.S.C. 402).
``(B) Labor organization activity.--
``(i) In general.--The term `labor 
organization activity' means labor organization 
elections, labor disputes, collective actions, 
and such other related activities identified by 
the Secretary.
``(ii) Other terms.--For purposes of clause 
(i)--
``(I) Collective action.--The term 
`collective action' means any action, 
including collective bargaining, 
described in section 7 of the National 
Labor Relations Act (29 U.S.C. 157) or 
any action that is a right of employees 
or labor organizations under the 
Railway Labor Act (45 U.S.C. 151 et 
seq.).
``(II) Labor dispute.--The term 
`labor dispute' has the meaning given 
such term under section 3 of the Labor-
Management Reporting and Disclosure Act 
of 1959 (29 U.S.C. 402).
``(III) Labor organization 
election.--The term `labor organization 
election' means any election described 
in section 9 of the National Labor 
Relations Act (29 U.S.C. 159) or 
section 2 of the Railway Labor Act (45 
U.S.C. 152).''.
(c) Special Rules.--
(1) In general.--Section 162(e)(4) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subparagraph:
``(D) Expenses relating to labor organizations or 
labor organization activities.--
``(i) In general.--For purposes of 
paragraph (1)(E), amounts paid or incurred in 
connection with attempting to influence the 
taxpayer's employees with respect to labor 
organizations or labor organization activities 
include--
``(I) any amount paid or incurred 
directly or indirectly by the taxpayer, 
including wages and other general and 
administrative costs, in connection 
with an action that results in--
``(aa) a complaint issued 
under section 10 of the 
National Labor Relations Act 
(29 U.S.C. 160) against the 
taxpayer for an unfair labor 
practice under section 8(a) of 
such Act (29 U.S.C. 158(a)),
``(bb) a settlement offer 
related to an investigation by 
the National Labor Relations 
Board of a charge of an unfair 
labor practice under section 
8(a) of such Act (29 U.S.C. 
158(a)) that results in a 
settlement of such charge 
without issuance of a complaint 
under section 10 of such Act 
(29 U.S.C. 160), or
``(cc) a finding of 
interference, influence, or 
coercion by a Federal court 
under section 2 of the Railway 
Labor Act (45 U.S.C. 152),
``(II) any amount paid or incurred 
directly or indirectly by the taxpayer, 
including wages and other general and 
administrative costs, in producing, 
conducting, or attending any meeting or 
training--
``(aa) which includes 
employees of the taxpayer who 
are or who could become members 
of a unit appropriate for the 
purposes of collective 
bargaining, and
``(bb) at which labor 
organizations or a labor 
organization activity is 
discussed, and
``(III) any amount which is 
required to be reported under the 
Labor-Management Reporting and 
Disclosure Act of 1959 (29 U.S.C. 401 
et seq.).
``(ii) Exceptions.--The following amounts 
shall not be treated as amounts paid or 
incurred in connection with attempting to 
influence the taxpayer's employees with respect 
to labor organizations or labor organization 
activities under paragraph (1)(E):
``(I) Amounts paid or incurred for 
communications or negotiations directly 
with the designated or selected 
representative of the employees of the 
taxpayer described in section 9(a) of 
the National Labor Relations Act (29 
U.S.C. 159(a)) or under the Railway 
Labor Act (45 U.S.C. 151 et seq.).
``(II) Amounts paid or incurred for 
communications directly with 
shareholders, as may be required under 
section 13 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78m).
``(III) Amounts paid or incurred 
for communications or consultations by 
the taxpayer in the process of 
voluntarily recognizing a labor 
organization as a representative in 
accordance with section 9 of the 
National Labor Relations Act (29 U.S.C. 
159).
``(IV) Amounts paid or incurred 
with respect to the operation of a 
labor-management partnership described 
in a collective bargaining agreement in 
effect between a representative of 
employees of the taxpayer and the 
taxpayer, including a labor management 
committee established pursuant to 
section 205A(a) of the Labor Management 
Relations Act, 1947 (29 U.S.C. 
175a(a)).
``(V) Amounts paid or incurred for 
communications or consultations related 
to the operation of a grievance 
procedure described in a collective 
bargaining agreement in effect between 
a representative of employees of the 
taxpayer and the taxpayer.
``(VI) Amounts paid or incurred by 
a labor organization.
``(VII) Amounts paid or incurred 
for communication materials, including 
visual or audio media, required to be 
posted for, or provided to, employees 
of the taxpayer by law, including under 
the National Labor Relations Act (29 
U.S.C. 151 et seq.) or the Railway 
Labor Act (45 U.S.C. 151 et seq.).
``(VIII) Amounts paid or incurred 
relating to a complaint which is issued 
by the National Labor Relations Board 
and which is set aside in full in 
accordance with subsection (e) or (f) 
of section 10 of such Act.''.
(2) Regulatory authority.--
(A) In general.--Section 162(e) of such Code, as 
amended by subsection (b), is amended by redesignating 
paragraph (7) as paragraph (8) and by inserting after 
paragraph (6) the following new paragraph:
``(7) Regulations.--The Secretary shall prescribe such 
guidance, rules, or regulations as are necessary to carry out 
the purposes of this subsection, including rules relating to 
the timing of any deductions in connection with amounts 
described in paragraph (4)(D)(ii)(VIII).''.
(B) Timing.--Not later than the date that is 240 
days after the date of the enactment of this Act, the 
Secretary of the Treasury (or the Secretary's delegate) 
shall prescribe guidance, rules, or regulations with 
respect to the application of the amendments made by 
this Act.
(d) Information Reporting.--
(1) Certain information included in tax returns.--
(A) In general.--Part I of subchapter B of chapter 
68 is amended by adding at the end the following new 
section:

``SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION WITH RESPECT TO 
EMPLOYER ACTIVITIES RELATING TO LABOR ORGANIZATIONS.

``(a) In General.--If any taxpayer who makes expenditures described 
in section 162(e)(1)(E) fails to provide with the return of tax for the 
taxable year to which such expenditures relate the information provided 
in subsection (c) with respect to such expenditures, or who fails to 
provide all of the information required under subsection (b) or fails 
to provide correct information, shall pay a penalty in the amount 
determined under subsection (b).
``(b) Determination of Penalty Amount.--
``(1) In general.--The amount of the penalty under this 
section for any failure described in subsection (a) shall be 
the greater of--
``(A) $10,000, or
``(B) the product of $1,000 and the number of full 
time equivalent employees of the employer (as 
determined under section 45R(d)(2)).
``(2) Increased penalty where failure continues.--
``(A) In general.--If any failure described in 
subsection (a)(1) continues for more than 90 days after 
the day on which the Secretary mails notice of such 
failure to the taxpayer, the taxpayer shall pay a 
penalty (in addition to the amount of any penalty under 
paragraph (1)) equal to the amount determined under 
paragraph (1) for each 30-day period (or fraction 
thereof) during which such failure continues after the 
expiration of such 90-day period.
``(B) Limitation.--The penalty imposed under this 
paragraph with respect to any failure shall not exceed 
$100,000.
``(c) Information To Be Provided.--The information required under 
this subsection shall include--
``(1) the dates that such activities described in section 
162(e)(1)(E) took place,
``(2) a statement indicating whether the activity was an 
activity described in item (aa), (bb), or (cc) of section 
162(e)(4)(D)(i)(I),
``(3) the amounts paid or incurred for such activities,
``(4) a copy of any disclosures which are required to be 
reported under the Labor-Management Reporting and Disclosure 
Act of 1959 (29 U.S.C. 401 et seq.), and
``(5) such other information as the Secretary may 
prescribe.
``(d) Reasonable Cause Exception.--No penalty shall be imposed by 
this section on any failure which is shown to be due to reasonable 
cause and not due to willful neglect.''.
(B) Clerical amendment.--The table of sections for 
part I of subchapter B of chapter 68 is amended by 
adding at the end the following new item:

``Sec. 6720D. Failure to include certain information with respect to 
employer activities relating to labor 
organizations.''.
(2) Third-party information reporting.--
(A) In general.--Subpart A of part III of 
subchapter A of chapter 61 of the Internal Revenue Code 
of 1986 is amended by inserting after section 6039J the 
following new section:

``SEC. 6039K. INFORMATION WITH RESPECT TO CERTAIN EMPLOYER ACTIVITIES 
RELATING TO LABOR ORGANIZATIONS.

``(a) In General.--Any person conducting activities described in 
section 162(e)(1)(E) on behalf of another person shall file a return 
(at such time and in such manner as the Secretary may by regulations 
prescribe, which includes the information described in subsection (b)).
``(b) Information To Be Provided.--Information required under 
subsection (a) shall include--
``(1) the person on behalf of whom the activities described 
in section 162(e)(1)(E) were performed,
``(2) the dates that such activities described in such 
section took place,
``(3) a statement indicating whether the activity was an 
activity described in item (aa), (bb), or (cc) of section 
162(e)(4)(D)(i)(I),
``(4) the amounts paid or incurred for such activities, and
``(5) such other information as the Secretary may 
prescribe.''.
(B) Penalty.--Subparagraph (B) of section 
6724(d)(1) of such Code is amended--
(i) by striking the comma at the end of 
clause (xxvii), as added by the Infrastructure 
Investment and Jobs Act, and inserting ``, 
or'', and
(ii) by adding at the end the following new 
clause:
``(xxviii) section 6039K (relating to 
information with respect to certain employer 
activities relating to labor organizations), 
and''.
(C) Clerical amendment.--The table of sections for 
subpart A of part III of subchapter A of chapter 61 of 
such Code is amended by inserting after the item 
relating to section 6039J the following new item:

``Sec. 6039K. Information with respect to certain employer activities 
relating to labor organizations.''.
(e) Conforming Amendments.--
(1) The heading for subsection (e) of section 162 of the 
Internal Revenue Code of 1986 is amended by striking ``and 
Political Expenditures'' and inserting ``, Political 
Expenditures, and Labor Organization Expenditures''.
(2) The heading of subparagraph (C) of section 162(e)(4) of 
such Code is amended by striking ``and political activities'' 
and inserting ``, political, and labor organization 
activities''.
(f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date that is 240 days after the date of the enactment of this Act.
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