To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 7559 Introduced in House (IH)] <DOC> 119th CONGRESS 2d Session H. R. 7559 To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES February 12, 2026 Mr. Austin Scott of Georgia introduced the following bill; which was referred to the Committee on Ways and Means _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SEC. 1. DENIAL OF INCOME TAX DEDUCTION ON OUTSOURCING PAYMENTS. (a) In General.--Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: ``SEC. 280I. OUTSOURCING PAYMENTS. ``(a) In General.--No deduction shall be allowed under this chapter for any outsourcing payment. ``(b) Outsourcing Payment.--For purposes of this section-- ``(1) In general.--The term `outsourcing payment' means any premium, fee, royalty, service charge, or other payment made-- ``(A) in the course of a trade or business, ``(B) to a foreign person, and ``(C) with respect to labor or services the benefit of which is directed, directly or indirectly, to consumers located in the United States. ``(2) Mixed payments.--In the case of any payment to a foreign person with respect to which labor or services are directed to consumers both within and without the United States, the amount treated as an outsourcing payment shall not exceed the amount equal to the product of such payment and a fraction-- ``(A) the numerator of which is the amount of labor or services with respect to such payment directed to consumers within the United States, to ``(B) the labor or services with respect to