Sponsors
The bill discourages offshoring and creates a dedicated fund for worker retraining—strengthening enforcement and domestic employment—at the cost of higher taxes and compliance burdens for businesses and taxpayers, reduced budget flexibility, and risks around privacy and program implementation.
Workers and domestic employees: the bill reduces incentives for U.S. firms to offshore work by taxing/denying deductions for outsourcing payments, which can help preserve domestic jobs and wages.
Displaced workers and communities: establishes a Domestic Workforce Fund (financed by the new tax/penalties) to provide retraining, apprenticeships, and state grants targeted to areas with high job displacement, improving reemployment prospects.
Tax enforcement and accountability: requires detailed reporting and corporate officer certification under penalty of perjury, strengthening IRS ability to detect cross-border tax avoidance and improving accuracy of filings.
Small businesses and consumers: firms that make outsourcing payments face an additional excise tax and nondeductibility of those payments, raising business costs that are likely passed onto consumers or reduce hiring/expansion.
Compliance and administrative burden: new and expanded reporting requirements, officer certifications, and uncertainty over what counts as an 'outsourcing payment' increase compliance costs for businesses, payors, tax preparers, and financial institutions.
Privacy and breadth of information collection: broad Treasury authority to demand 'any other information' creates risk of expansive data collection and raises privacy and administrative burden concerns for taxpayers and institutions.
Based on analysis of 4 sections of legislative text.
Imposes an excise tax and reporting on "outsourcing payments," denies deductions for those payments, and directs receipts into a Domestic Workforce Fund for retraining and grants.
Imposes a new excise tax on payments from U.S. persons to foreign persons that are classified as "outsourcing payments," requires new reporting and officer certifications, and denies federal tax deductions for those payments. Revenues and related penalties are directed into a new Treasury account, the Domestic Workforce Fund, to pay for Department of Labor workforce development, apprenticeships, and state grants for communities with high job displacement. The tax and deduction denial apply to payments made after December 31, 2025.
Introduced October 6, 2025 by Bernardo Moreno · Last progress October 6, 2025