What does Preamble of HR 7559 do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment would deny deductions for outsourcing payments.

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To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments. — HR. 7559

Q: What does DENIAL OF INCOME TAX DEDUCTION ON OUTSOURCING PAYMENTS. of HR 7559 do?

This section amends the Internal Revenue Code of 1986 by adding Section 280I, which disallows income tax deductions for 'outsourcing payments'. An 'outsourcing payment' is defined as a payment made in the course of a trade or business to a foreign person, with respect to labor or services benefiting consumers in the United States. If a payment to a foreign person benefits consumers both within and outside the United States, the amount considered an outsourcing payment is limited to a fraction based on the proportion of services directed to U.S. consumers. The term 'foreign person' excludes corporations or partnerships organized under the laws of a U.S. possession. The Secretary of the Treasury is authorized to issue regulations and guidance to prevent avoidance of this section. The amendments apply to payments made after December 31, 2025, in taxable years ending after that date.

Last updated: 2/12/2026 · Introduced: 2/12/2026

Author: Austin Scott (R-GA)

TL;DR (AI)

This bill disallows U.S. businesses from deducting income tax on payments made to foreign individuals or entities for labor or services primarily benefiting U.S. consumers.
Payments to foreign persons that benefit both U.S. and foreign consumers will have the deductible amount limited proportionally to the services benefiting U.S. consumers.
The rule applies to payments made after December 31, 2025.

119th Congressin committeeOfficial page

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Includes provisions on preamble, denial of income tax deduction on outsourcing payments..

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