Austin Scott (R-GA)
To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.
A Republican bill with no cosponsors
Last activity — Referred to the House Committee on Ways and Means.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- 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
- Scored +5
Does this raise the taxes companies pay?
The bill increases the tax burden on corporations by denying deductions for payments made to foreign persons for services benefiting U.S. consumers.
- Scored +3
Does this give the federal government more power?
The bill grants the Secretary additional regulatory authority to prevent the avoidance or abuse of the new tax rules.
- Scored +3
Would union members be better off under this?
The bill may help domestic workers by increasing the cost of outsourcing labor to foreign competitors.
The opposite
- Scored -4
Would business owners be better off under this?
Business owners engaged in outsourcing will face higher taxable income due to the denial of these expense deductions.
- Scored -3
Does this make trade with other countries easier?
The bill imposes new tax-related costs on transactions with foreign persons, which may discourage international trade and services.
- Scored -2
Does this make it easier to run a small business?
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
-
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.
-
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.
-
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. Tap or hover a score for the reason it gave.
- Economy And Finance
- Does this raise the taxes companies pay? — The bill increases the tax burden on corporations by denying deductions for payments made to foreign persons for services benefiting U.S. consumers. Is this likely to create jobs? — By making outsourcing more expensive for companies, the bill provides a financial incentive to retain labor within the United States. Does this make the government pay for what it commits to? — The denial of deductions will increase federal tax revenue from corporations. Does this make it easier to run a small business? — Small businesses that rely on international service providers may face increased costs due to the loss of tax deductions.
- Governance And Ideology
- Does this give the federal government more power? — The bill grants the Secretary additional regulatory authority to prevent the avoidance or abuse of the new tax rules.
- National Security And Foreign Policy
- Does this make trade with other countries easier? — The bill imposes new tax-related costs on transactions with foreign persons, which may discourage international trade and services.
- Demographic And Interest Groups
- Would union members be better off under this? — The bill may help domestic workers by increasing the cost of outsourcing labor to foreign competitors. Would business owners be better off under this? — Business owners engaged in outsourcing will face higher taxable income due to the denial of these expense deductions.
- 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.