Bill · H.R. 7559· House(119-HR-7559)
To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.
- Introduced
- 2/12/2026
- Last activity
- 2/12/2026 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Austin Scott
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill proposes an amendment to the Internal Revenue Code of 1986. It seeks to deny income tax deductions for what it defines as "outsourcing payments." An outsourcing payment is a premium, fee, royalty, service charge, or other payment made to a foreign person for labor or services that benefit consumers in the United States. The bill includes specific rules for mixed payments where services benefit both domestic and foreign consumers. The Secretary is tasked with creating regulations to prevent the avoidance of these rules. These changes would apply to payments made after December 31, 2025.
Yes· 3 of 5
Does this raise the taxes companies pay?+5
The bill increases the tax burden on corporations by denying deductions for payments made to foreign persons for services benefiting U.S. consumers.
Does this give the federal government more power?+3
The bill grants the Secretary additional regulatory authority to prevent the avoidance or abuse of the new tax rules.
Would union members be better off under this?+3
The bill may help domestic workers by increasing the cost of outsourcing labor to foreign competitors.
The opposite
Would business owners be better off under this?-4
Business owners engaged in outsourcing will face higher taxable income due to the denial of these expense deductions.
Does this make trade with other countries easier?-3
The bill imposes new tax-related costs on transactions with foreign persons, which may discourage international trade and services.
Does this make it easier to run a small business?-2
Small businesses that rely on international service providers may face increased costs due to the loss of tax deductions.
Who it would affect, and how
Potential Positive Impacts for People
- Denial of deductions for outsourcing payments (Section 1(a)): This provision prevents businesses from deducting certain payments made to foreign persons for services that benefit U.S. consumers, which changes how these business expenses are treated for tax purposes.
Potential Negative Impacts for People
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Denial of deduction for any outsourcing payment (Section 1(a), SEC. 280I(a)): This could create a financial burden for businesses that make payments to foreign persons for labor or services directed to U.S. consumers, as they would no longer be allowed to deduct those costs.
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Treatment of mixed payments (Section 1(a), SEC. 280I(b)(2)): Businesses making payments that benefit both domestic and international consumers would have to calculate a specific fraction to determine the non-deductible portion, which adds complexity to their payments.
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Regulatory oversight (Section 1(a), SEC. 280I(d)): The Secretary is authorized to prescribe regulations to prevent the avoidance or abuse of this section, which may include monitoring transfer pricing arrangements.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Increases Corporate Taxes+5Increases Job Creation+2Improves Fiscal Responsibility+1Improves Small Business Support-2
- Governance And Ideology
- Increases Federal Power+3
- National Security And Foreign Policy
- Improves International Trade-3
- Demographic And Interest Groups
- Good For Union Workers+3Good For Business Owners-4
- 2/12/2026
- Referred to the House Committee on Ways and Means.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.