H.R. 3715

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3715 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3715

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 4, 2025

Mr. Gill of Texas (for himself, Mr. Nehls, Mr. McClintock, Mr. Gosar, 
Ms. Boebert, Mr. Weber of Texas, Mr. Norman, Mr. Roy, Mr. Crane, Mr. 
Moore of Alabama, Mr. Harris of North Carolina, Mr. Perry, Ms. Mace, 
and Mrs. Biggs of South Carolina) 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 Workforce, 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.

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 ``New Illegal Deduction Elimination 
Act'' or the ``New IDEA Act''.

SEC. 2. CLARIFICATION THAT WAGES PAID TO UNAUTHORIZED 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 unauthorized 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 defined under section 
274A(h)(3) of the Immigration and Nationality Act (8 
U.S.C. 1324a(h)(3)).
``(B) Wages.--For the purposes of this paragraph, 
the term `wages' means all remuneration 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(a) of the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a 
note) and obtains confirmation of identity and 
employment eligibility in compliance with the terms and 
conditions of the program with respect to the hiring 
(or recruitment or referral) of an employee, 
subparagraph (A) shall not apply with respect to wages 
paid to such employee.
``(D) Burden of proof.--In the case of any 
examination of a return in connection with a deduction 
under this section by reason of this paragraph, the 
Secretary shall bear the burden of proving that wages 
were paid to or on behalf of an unauthorized alien.
``(E) Limitation on taxpayer audit.--The Secretary 
may not commence an audit or other investigation of a 
taxpayer solely on the basis of a deduction taken under 
this section by reason of this paragraph.''.
(b) Six-Year Limitation on Assessment and Collection.--Subsection 
(c) of section 6501 of the Internal Revenue Code of 1986 (relating to 
exceptions) is amended by adding at the end the following new 
paragraph:
``(13) 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 Nationality Act (8 U.S.C. 1324a) is amended--
(1) in subparagraph (b)(5), by inserting ``, section 
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 Homeland Security, and the 
Secretary of the Treasury, shall jointly establish a program to 
share information 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 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 section 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 Secretary shall disclose to officers and 
employees of such Administration or Department--
``(A) taxpayer identity information of employers 
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 individuals 
to whom such wages were paid,
for purposes of carrying out any enforcement activities of such 
Administration or Department with respect 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 inserting 
``(5), (7), or (9)'', and
(ii) by striking ``(5) or (7)'' in 
subparagraph (F)(ii) and inserting ``(5), (7), 
or (9)''.
(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, 2024.

SEC. 3. MODIFICATION OF E-VERIFY PROGRAM.

(a) Making Permanent.--Subsection (b) of section 401 of the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 
1324a note) is amended by striking the last sentence.
(b) Application to Current Employees.--
(1) Voluntary election.--The first sentence of section 
402(a) of such Act is amended to read as follows: ``Any person 
or other entity that conducts any hiring (or recruitment or 
referral) in a State or employs any individuals in a State may 
elect to participate in the E-Verify Program.''.
(2) Benefit of rebuttable presumption.--Paragraph (1) of 
section 402(b) of such Act is amended by adding at the end the 
following: ``If a person or other entity is participating in 
the E-Verify Program and obtains confirmation of identity and 
employment eligibility in compliance with the terms and 
conditions of the program with respect to individuals employed 
by the person or entity, the person or entity has established a 
rebuttable presumption that the person or entity has not 
violated section 274A(a)(2) with respect to such 
individuals.''.
(3) Scope of election.--Subparagraph (A) of section 
402(c)(2) of such Act is amended to read as follows:
``(A) In general.--Any electing person or other 
entity may provide that the election under subsection 
(a) shall apply (during the period in which the 
election is in effect)--
``(i) to all its hiring (and all 
recruitment or referral);
``(ii) to all its hiring (and all 
recruitment or referral and all individuals 
employed by the person or entity);
``(iii) to all its hiring (and all 
recruitment or referral) in one or more States 
or one or more places of hiring (or recruitment 
or referral, as the case may be); or
``(iv) to all its hiring (and all 
recruitment or referral and all individuals 
employed by the person or entity) in one or 
more States or one or more place of hiring (or 
recruitment or referral or employment, as the 
case may be).''.
(4) Procedures for participants in e-verify program.--
Subsection (a) of section 403 of such Act is amended--
(A) in the matter preceding paragraph (1), by 
inserting ``or continued employment in the United 
States'' after ``United States''; and
(B) in paragraph (3)--
(i) in subparagraph (A), by striking all 
that follows ``(as specified by the Secretary 
of Homeland Security)'' and inserting ``after 
the date of the hiring, or recruitment or 
referral, in the case of inquiries made 
pursuant to a hiring, recruitment or referral 
(and not of previously hired individuals).''; 
and
(ii) in subparagraph (B), by striking 
``such 3 working days'' and inserting ``the 
specified period''.
(c) Application to Job Applicants.--Section 402(c)(2) of such Act 
is amended by adding at the end the following:
``(C) Job offer may be made conditional on final 
confirmation by e-verify.--A person or other entity 
that elects to participate in the E-Verify Program may 
offer a prospective employee an employment position 
conditioned on final verification of the identity and 
employment eligibility of the employee using the 
employment eligibility confirmation system established 
under section 404.''.
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