Sponsors (16)
The bill strengthens and stabilizes E‑Verify participation and tax protections for employers while expanding data sharing and enforcement tools — a trade-off that reduces legal risk for compliant businesses but raises privacy risks, longer tax exposure, and greater chances of verification errors that can harm immigrant workers and jobseekers.
Employers who participate in E-Verify and receive a final confirmation are largely shielded from illegal-hire liability and gain regulatory stability because a formerly temporary E‑Verify provision is made permanent.
Employers who follow E‑Verify procedures and meet program requirements can continue claiming wage tax deductions for verified hires, and the Treasury is constrained from opening audits solely because a deduction was claimed, reducing compliance risk for lawful employers.
Authorized information sharing among SSA, DHS, and Treasury can help identify unauthorized workers and speed administrative corrections to payroll and benefit records, strengthening enforcement of immigration and payroll laws.
Expanded data sharing (IRS records, no‑match letters, earnings suspense file) and new disclosure authorities increase privacy risks and the chance of erroneous exposure of worker or employer identities.
Employers who unknowingly hire unauthorized workers risk losing federal wage deductions, raising labor costs for those businesses and creating potential downstream price or hiring impacts.
Extending the tax assessment period to six years for disallowed deductions lengthens audit exposure and financial uncertainty for employers about past years' liabilities.
Based on analysis of 3 sections of legislative text.
Disallows tax deductions for wages to unauthorized aliens, expands E‑Verify, and authorizes interagency identity/earnings data sharing and IRS disclosures.
Official title: 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.
Introduced June 4, 2025 by Brandon Gill · Last progress June 4, 2025
Disallows federal tax deductions for wages paid to or on behalf of individuals the law defines as "unauthorized aliens," creates a six-year assessment window when taxpayers claim such deductions, and requires interagency data-sharing so SSA, DHS, and Treasury can identify those individuals. It also expands and changes E‑Verify rules: more entities may opt in, employers can condition offers on final E‑Verify confirmation, E‑Verify confirmations create a rebuttable presumption against certain employer violations, and timing/scope rules for using E‑Verify are adjusted. The bill lets Treasury disclose certain employer and payee identity information to SSA and DHS and adds an E‑Verify safe harbor and burden-of-proof rules in IRS examinations. The deduction disallowance and extended assessment rule apply to tax years beginning after Dec. 31, 2024; other provisions take effect on enactment.