110 HR 6813 IH: New IDEA (Illegal Deduction Elimination Act) U.S. House of Representatives 2008-08-01 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 2d Session H. R. 6813 IN THE HOUSE OF REPRESENTATIVES August 1, 2008 Mr. King of Iowa (for himself, Mr. Bartlett of Maryland, Mr. Bilbray, Mrs. Blackburn, Mrs. Boyda of Kansas, Mr. Broun of Georgia, Mr. Brown of South Carolina, Mr. Gohmert, Ms. Ginny Brown-Waite of Florida, Mr. Burgess, Mr. Burton of Indiana, Mr. Calvert, Mr. Carter, Mrs. Cubin, Mr. Culberson, Mr. David Davis of Tennessee, Mr. Deal of Georgia, Mr. Doolittle, Mrs. Drake, Mr. Duncan, Mr. Everett, Ms. Fallin, Mr. Feeney, Mr. Forbes, Ms. Foxx, Mr. Franks of Arizona, Mr. Gallegly, Mr. Gingrey, Mr. Goode, Mr. Goodlatte, Mr. Issa, Mr. Jones of North Carolina, Mr. Jordan of Ohio, Mr. Kingston, Mr. Latta, Mr. Lewis of Kentucky, Mr. Linder, Mr. Manzullo, Mr. McCaul of Texas, Mr. McCotter, Mr. Gary G. Miller of California, Mr. Miller of Florida, Mrs. Myrick, Mr. Neugebauer, Mr. Pitts, Mr. Poe, Mr. Rohrabacher, Mr. Roskam, Mr. Sensenbrenner, Mr. Sessions, Mr. Shadegg, Mr. Shuler, Mr. Smith of Texas, Mr. Tancredo, Mr. Walberg, Mr. Weldon of Florida, and Mr. Westmoreland) 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 Labor, 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.

1.

Short title

This Act may be cited as the New IDEA (Illegal Deduction Elimination Act).

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 basic pilot program described in section 403 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.. (b)

6-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: (11)

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)

Record keeping

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, 2007.

3.

Modification of basic pilot program for employment eligibility verification

(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 a pilot 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 a pilot 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 basic pilot 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 Attorney General) 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.