Newhouse Introduces Legislation to Protect Public Lands from Foreign Adversaries

Source: United States House of Representatives – Congressman Dan Newhouse (4th District of Washington)

Headline: Newhouse Introduces Legislation to Protect Public Lands from Foreign Adversaries

WASHINGTON, D.C. – Today, Rep. Dan Newhouse (WA-04) introduced the Keeping Public Lands Out of Adversarial Hands Act to add the United States Secretary of the Interior to the Committee on Foreign Investment in the United States (CFIUS).  

“Last summer, we were successful in adding the Secretary of Agriculture to the Committee on Foreign Investment in the United States to counter Communist China’s efforts to purchase American farmland. Today, I am taking the next step to protect American land by introducing legislation to add the U.S. Secretary of the Interior to CFIUS,” said Rep. Newhouse.  

Newhouse added, “In this role, the Secretary and the Department of the Interior will have the authority to review foreign investment into lands near public land across the country and help identify potential national security threats to the valuable natural resources we have right under our feet. Our adversaries like the CCP, North Korea, Russia, and Iran have no business owning these lands, and we need to seize every opportunity to ensure they never do.” 

Rep. Newhouse was joined by Reps. Jeff Hurd (CO-03), John Rose (TN-06), Ashley Hinson (IA-02), and Mike Ezell (MS-04) as cosponsors of the legislation.  

This legislation adds the Secretary of the Interior to CFIUS to review transactions for land or resources adjacent to land or sites owned or managed by the Bureau of Land Management, the Bureau of Reclamation, the Bureau of Indian Affairs, the National Park Service, the U.S. Fish and Wildlife Service, and the Bureau of Ocean Energy Management. 

Background 

In July 2025, a Memorandum of Understanding between the Department of the Treasury and the Department of Agriculture was signed, implementing a provision Rep. Newhouse secured in the Fiscal Year 2024 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations bill to add the Secretary of Agriculture to CFIUS.

See full bill text here.  

###

Jayapal Condemns Trump’s Suspension of Immigrant Visas for 75 Countries

Source: United States House of Representatives – Congresswoman Pramila Jayapal (7th District of Washington)

WASHINGTON, D.C. — U.S. Representative Pramila Jayapal (WA-07), Ranking Member of the Immigration Integrity, Security, and Enforcement Subcommittee, issued the following statement denouncing the Trump administration’s announcement that it will suspend the issuance of Immigrant Visas for 75 countries:

“Every day, the Trump administration and the Republican Party continue to show the American people they oppose all forms of immigration. Trump is once again using lies, racism, and xenophobia to block entire groups of people from coming and contributing to this country.

“Today’s announcement will largely impact and target family immigration, which includes people who are married to U.S. citizens.  These people have done everything right. They have followed the law, many have waited in backlogs for years, and are so close to being reunited with their loved ones, only to have Trump pull the rug out from under them at the last second. It is just cruel.

“This stunning new policy will keep families separated indefinitely. It must be immediately reversed.”

Issues:

Congressman Perry Introduces the Divesting from Communist China’s Military Act

Source: United States House of Representatives – Congressman Scott Perry (PA-10)

Washington, D.C. – Congressman Scott Perry (PA-10) introduced his Divesting from Communist China’s Military Act to tighten sanctions on Chinese military companies operating in the U.S. and undermining and threatening American prosperity. Senator Rick Scott (R-FL) is introducing companion legislation in the U.S. Senate.

 

Our greatest enemy should never have access to, nor benefit from, our capital markets or military procurement process in any way; it’s ludicrous, and shouldn’t even have required legislation, but it does,” said Rep. Perry. “I’m happy to join forces with Senator Scott to get this through Congress, to the President’s desk, and stop this insanity once and for all.”

 

Senator Rick Scott said, “Communist China and Xi Jinping have shown time and again that they are our enemy, and American investments should not be used to support them in their attempt to destroy our way of life. For too long, Chinese companies have been given free rein to lie, cheat, and circumvent U.S. regulations intended to keep American investors safe and American dollars out of the hands of companies, like those associated with the Chinese military, bent on ruining our economy and our country. This bill is a commonsense effort to keep Americans’ money out of the hands of our enemies.”  

 

The Act mandates full parity between the U.S. Treasury’s Non-Specially Designated Nationals (SDN), Chinese Military-Industrial Complex Companies (NS-CMIC) List (bars Chinese Communist Party companies from accessing American capital markets), and the Department of War’s 1260H list (annual list of Chinese military companies that operate directly/indirectly in the U.S.).

 

The 1260H CMIC list faces a procurement prohibition beginning on June 30, 2026. Allowing these companies to benefit from American capital runs counter to American interests. This critical legislation aligns the two lists, strengthening our sanctions regime.

 

Read the bill text HERE

ICYMI: Rep. Grothman at RSC & VAT Panel Calls for Ending Marriage Penalties and Strengthening Families

Source: United States House of Representatives – Congressman Glenn Grothman (R-Glenbeulah 6th District Wisconsin)

ICYMI: Rep. Grothman at RSC & VAT Panel Calls for Ending Marriage Penalties and Strengthening Families

Rep. Glenn Grothman (R-WI) joined the Republican Study Committee and Values Action Team panel, “Marriage and the Government: How Public Policy Undermines Marriage,” to discuss how federal policies create marriage penalties that discourage families from formalizing their households. He emphasized that these policies embedded in the tax code, federal benefits, and other programs not only harm families financially but also weaken social stability. 

The panel featured a distinguished lineup of lawmakers and policy experts, including: 

During his remarks, Rep. Grothman highlighted specific examples of how marriage penalties in federal programs, from taxes to student loan benefits, create unnecessary financial disincentives for couples to marry. He also introduced his Student Loan Marriage Penalty Elimination Act, legislation designed to remove these barriers and strengthen families and noted the broad support for reform demonstrated by a coalition letter signed by pro-family organizations urging Congress to include marriage penalty relief in a future reconciliation bill. 

Rep. Grothman stressed that addressing marriage penalties should be a priority for Congress. The discussion included policy solutions and a broader conversation on how lawmakers can remove structural obstacles that discourage marriage while promoting strong, thriving households. 

 

 

U.S. Rep. Glenn Grothman (R-Glenbeulah) proudly serves the people of Wisconsin’s 6th Congressional District in the U.S. House of Representatives 

Rep. Peters Helps Pass Funding Package to Invest in Energy, Science, Public Safety, and San Diego Priorities

Source: United States House of Representatives – Congressman Scott Peters (52nd District of California)

Washington, D.C. – Today, Representative Scott Peters (CA-50) issued the following statement after the House passed a package of three funding bills for Fiscal Year 2026—The Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026. Included in the language of these bills were six of Rep. Peters’ Community Project Funding (CPF) requests. The package, including CPF requests, is subject to change as the legislation moves to the Senate.

“This package reflects the priorities my constituents, and hardworking Americans, want to see Congress address: lowering energy costs, strengthening public safety, investing in clean energy and science, and upgrading critical water infrastructure,” Rep. Peters said. “It also holds the Trump Administration accountable by reasserting Congress’s power of the purse and taking steps to end their slash-and-burn approach, ensuring no one is above the law. I hope the Senate gets this bill over the finish line without delay so we can deliver real results for San Diego and communities across the country.”

Highlights of the package include:

  • Addresses high electricity costs by investing $375 million in our electric grid, which Rep. Peters helped secure, tackling a major point of rising electricity costs and strengthening reliability.
  • Supports $1.8 billion in clean, affordable, and secure energy programs to lower energy bills, including nuclear energy activities—a bipartisan effort led by Rep. Peters to strengthen America’s nuclear energy sector.
  • Curtails the reckless abuses of the Trump Administration by restricting efforts to dismantle entire agencies without Congressional authorization, blocking wasteful spending on useless vanity projects, and diminishing the Administration’s ability to wipeout Congressionally approved spending.
  • Supports federal programs to support a wide range of criminal justice program areas, ensuring cities like San Diego have the tools to strengthen public safety, expand mental health crisis intervention programs, and invest in prevention efforts that keep our neighborhoods safe.
  • Repudiates the Trump Administration’s anti-science agenda by providing strong funding for scientific and technological research. Rep. Peters led a bipartisan effort to secure $58 million for NASA’s Space Grant College and Fellowship Program, supporting STEM education and research through a network of colleges and universities, including the University of California, San Diego.
  • Invests $2.8 billion in our nation’s water infrastructure, including drinking water, wastewater, and storm water management projects in San Diego, and across the country.

Also included in the package were six Community Project Funding requests led by Rep. Peters for FY 2026 funding, totaling more than $6.3 million.

“These investments will help prepare San Diego for the future, from safer water to stronger infrastructure to more opportunities for students to gain the skills that power our local economy,” Rep. Peters continued. “I’m proud to deliver targeted federal funding that improves the quality of life for my constituents and delivers real, tangible benefits for San Diegans.”

Community Project Funding requests made by Rep. Peters include:

  • San Diego City College CyberLab — $1,031,000
    This funding would be used for modern computers, high-end laptops, and cyber range access to support students in the Cyber Defense and Analysis programs. It will address a critical gap in national security by preparing students to enter the cybersecurity workforce and counter evolving cyber threats.
  • Coastal Ocean Pathogen Pollution Forecast Model — $1,031,000
    This funding would be used to develop, deploy, and maintain real-time monitoring stations of oceanographic conditions within the Tijuana estuary. It will help better manage beach contamination events, which in turn will minimize public health risks and economic damage.
  • Engineering and Computer Science Capacity Building Project — $1,031,000
    This funding would be used to for laboratory and teaching equipment to expand California State University San Marcos’s systems, electrical, and computer engineering programs. This would address critical workforce needs, drive regional economic growth, and foster long-term societal benefits.
  • City of Coronado Stormwater Mitigation Project — $1,092,000
    This funding would be used for the protection of surface and groundwater quality and assist with the minimization of pollutants entering waterways, preventing flooding during heavy rain events and enhance water quality.
  • Pump Station Component D Upgrade — $1,092,000
    This funding would be used to increase the community’s drainage system’s capacity by providing electrical, structural, and mechanical improvements to the pump station. This is essential to mitigate flood risks, lower costs, and ensure the pump’s power reliability.
  • Famosa Slough Alley Slope Restoration — $1,092,000
    This funding would be used for the construction phase of a storm drain infrastructure project to address severe erosion in an alleyway that floods during rain events, preventing further damage to nearby streets and residential neighborhoods.

Community Project Funding enables Members of Congress to advocate directly for local priorities, ensuring transparency and accountability. To see more about Rep. Peters’ FY26 requests, click here.

###

Rep. Peters Votes to Restore Tax Relief to Address Rising Health Care Costs

Source: United States House of Representatives – Congressman Scott Peters (52nd District of California)

Washington, D.C. – Today, Representative Scott Peters (CA-50) issued the following statement after voting to pass legislation that extends the enhanced Affordable Care Act (ACA) tax credits for three years (H.R. 1834). This follows a petition to force a vote on the extension that received enough signatures from House Democrats and Republicans – an effort Rep. Peters supported.

“By letting ACA tax credits expire on January 1st, President Trump and Congressional Republicans drove health care costs up overnight while offering no plan to stop insurance premiums from skyrocketing. Today’s vote shows immediate action to prevent the health care crisis is a priority for Democrats and even some Republicans.

“The Affordable Care Act is not perfect, and a three-year extension of these credits is not a fiscally sustainable solution on its own. But Republican health care policies caused so much chaos that we had to act immediately to address the premium increases millions of Americans are feeling right now.

“Combined with deep Medicaid cuts in the so-called ‘One Big Beautiful Bill,’ higher premiums are pushing patients to delay care, drop coverage, or go without health care altogether. If Congress fails to act, millions of Americans will lose their health care and get sicker. We cannot afford to wait until things get even worse.

“This step is especially important for San Diego. Nearly 150,000 San Diegans relied on the ACA tax credits to afford coverage, and more than 125,000 are already seeing their health care costs surge, including 28,000 people in CA-50 alone. If Republicans continue to block action, tens of thousands of San Diegans will lose their health care coverage – and I’m doing everything I can in Congress to prevent this from happening.

“While I have concerns about this resolution, it’s the strongest step forward right now to provide immediate relief to millions of Americans, and I’m willing to work with anyone, Republican or Democrat, who has a comprehensive solution.

“In the meantime, this was an important step to move the conversation to the Senate and keep pressure on Republicans to stop obstructing and start working with us on real health care reforms.”

 ###

Rep. Peters’ Statement on Trump’s Military Action in Venezuela

Source: United States House of Representatives – Congressman Scott Peters (52nd District of California)

Washington, D.C. – Today, Representative Scott Peters (CA-50) issued the following statement after President Trump’s announcement that the U.S. conducted a large-scale military operation in Venezuela overnight, capturing President Nicolás Maduro and his wife:

“I was deeply alarmed to wake up to the news that the United States has invaded—and now taken over—Venezuela.

“Nicolás Maduro is an illegitimate dictator who has caused immense suffering for the Venezuelan people. But Venezuela does not pose a security cost to the United States that would justify this action. It seems to be a move on Venezuelan oil resources. We know from the pardon of former Honduran President Hernandez that bringing Maduro to justice on drug charges is a pretext.

“And while many Venezuelans and Americans hoped to see Maduro gone, we know that ‘running a country’ will have ongoing costs. We know that from the two decades and trillions of dollars we gave in the Middle East.  President Trump has now pulled the U.S. into another conflict that polling shows Americans overwhelmingly oppose. And after decades of endless wars, we do not need another one.

“In San Diego, a proud military community, we know better than most the costs of military action for our service members and their families back home. That’s why we are particularly suspicious of impulsive military decisions with unclear objectives. We are grateful that no U.S. service members were killed and that the mission went as planned, but we are concerned about the undefined mission ahead.

“From the President’s press conference, it’s clear that there is no strategy for going forward. Capturing a leader is not a plan. Without a defined endgame, this action risks prolonged instability, unpredictable escalation, and U.S. casualties on the ground.

“Congress is vested by the Constitution with the power to declare war, but Congress was not notified of this action ahead of time. Ordering a major military operation without Congress is not only dangerous but unconstitutional. That’s why I voted for the War Powers Resolution to reaffirm that the president does not have the authority to take military action in Venezuela.

“It’s time for the Administration to brief Congress on this action and the strategy going forward. Donald Trump continues to make our country weaker by losing friends and gaining enemies around the world. We need to prevent this from becoming another ill-conceived nation-building debacle.”

###

Peters, Evans, Garbarino, Vasquez Unveil Effort to Accelerate Federal Permitting Processes

Source: United States House of Representatives – Congressman Scott Peters (52nd District of California)

Washington, D.C. – Today, Representatives Scott Peters (CA-50), Gabe Evans (CO-08), Andrew Garbarino (NY-02), and Gabe Vasquez (NM-02) released a discussion draft for the Create Expedited Reviews to Transform American Infrastructure Now (CERTAIN) Act to transform the federal permitting process and meet America’s energy and electricity needs. Reps. Juan Ciscomani (AZ-06) and Adam Gray (CA-13) have also signed on.

The CERTAIN Act would address permit certainty—ensuring federal agencies handle project authorizations and environmental reviews fairly and efficiently, with clear timelines, notice requirements, and accountability. This would facilitate the build out of the energy we need to lower costs, create jobs, and protect our environment. It also emphasizes coordinating between different agencies involved in these processes to avoid unnecessary delays.

“It’s no secret that our surging energy demand is straining our grid and our wallets,” Congressman Peters said. “As we face the growing challenge of powering our nation’s future, we must act quickly and effectively. Our CERTAIN Act is the comprehensive solution we need—giving us the tools to tackle energy challenges head-on, without unnecessary delays, and ensuring we’re meeting the moment with urgency and responsibility.”

“As the representative of a truly all-of-the-above energy district, I hear from oil and gas and renewable energy producers alike that overburdensome permitting processes and lack of permit certainty has plagued investment and delayed innovation. Across the U.S., modernizing how we permit our infrastructure is absolutely vital to meeting our growing energy demand and lowering costs for working families. I’m proud to lead these bipartisan discussions to build upon the work already done in the House to strengthen American jobs, businesses and markets, reduce cost of living, and provide investors greater certainty when allocating capital to current and future energy projects,” said Congressman Evans

“Endless permitting roadblocks hurt communities and drive up energy costs. I’m proud to co-lead the bipartisan CERTAIN Act to bring transparency and accountability to the permitting process and ensure projects that meet their requirements can move forward on time,” said Congressman Garbarino.

“Over the past decade, we’ve seen how shifting policies from one administration to the next lead to stalled energy projects and make long-term planning impossible, and we cannot afford to leave our energy producers exposed to this political pendulum. That’s why I’m proud to be leading the CERTAIN Act, a bipartisan solution that protects the permitting process for all types of energy projects from undue political interference,” said Congressman Vasquez.

“We need to build more, fast, if we are going to address the nation’s affordability and reliability setbacks,” said Congressman Gray “Achieving an all-of-the-above energy approach is critical for our communities.  I am proud to co-lead this bipartisan reform to ensure all projects can move forward without threat once permitted.” 

“Arizona families and businesses are counting on smart, reliable energy solutions that support growth and opportunity,” said Congressman Ciscomani. “The CERTAIN Act brings clarity, coordination, and common sense to the federal permitting process so we can responsibly build the energy infrastructure our communities need. We can and should increase energy production while protecting our environment, and this bipartisan effort sets clear timelines and accountability to create jobs, strengthen our grid, and power America’s future responsibly.”

Key provisions of the CERTAIN Act include:

  • Protection from Political Interference: Provide certainty for infrastructure investment by ensuring that lawfully issued permits that remain in compliance are safeguarded from political interference.
  • Clear Timelines and Deadlines: Set specific deadlines, timelines, and milestones for federal agencies in the environmental review process. This would cover all reviews, under all environmental laws, for all projects.
  • Transparency and Accountability: Promote transparency and accountability throughout the federal environmental review process, including by empowering decision-makers to resolve disputes.
  • Address Workforce Needs: Require agencies to analyze and respond to workforce and technical needs, ensuring they can meet statutory obligations for environmental reviews.
  • Agency Accountability: Strengthen communication between agencies and project sponsors on any delays, with opportunities to hold agencies accountable in court for missing deadlines and review milestones.

A section-by-section on the draft is available HERE. A one pager is available HERE. Read what organizations are saying HERE. Legislative text for the discussion draft is available HERE.

Rep. Frankel Urges Action on Flight Restrictions Before Transportation and Infrastructure Committee

Source: United States House of Representatives – Congresswoman Lois Frankel (FL-21)

Today, Rep. Frankel (FL-22) spoke in front of the House Transportation and Infrastructure Committee to highlight the impact on Palm Beach County communities of disruptive 24/7 flight restrictions around Mar-a-Lago. In her remarks, Rep. Frankel called on the Committee to expedite direct engagement between the Federal Aviation Administration (FAA) and the U.S. Secret Service, Palm Beach International Airport leadership, local officials, and residents in the affected neighborhoods.

Below is an excerpt from Rep. Frankel’s remarks, as prepared:

“Residents are reporting constant noise, increased air pollution, declining property values, and growing concerns about delays and flight safety at Palm Beach International Airport. In just a short period of time, the county airport has received hundreds of complaints…

In Florida, people live their lives outdoors. Because these restrictions are now in place year-round, thousands of residents are living with disruption every single day.

We know that protecting the President is essential. No one disputes that. The question is, do security and quality of life have to be mutually exclusive? My community is hoping that there is room to explore alternatives that maintain strong security while reducing the impact on surrounding areas.”

For Rep. Frankel’s full remarks, click here:

Democratic Ways And Means Committee Members Seek Clarity From IRS On “Bags Of Cash” Tax Treatment Under Republican Tax Law

Source: United States House of Representatives – Representative Don Beyer (D-VA)

U.S. Representatives Don Beyer (D-VA), Lloyd Doggett (D-TX), Linda Sanchez (D-CA), Judy Chu (D-CA), and Brad Schneider (D-IL), all of whom serve on the House Committee on Ways and Means, yesterday wrote to the Internal Revenue Service (IRS) requesting clarity on IRS guidance for the “no tax on tips” provision of H.R. 1, the “One Big Beautiful Bill Act,” tax legislation enacted last year by Republicans in Congress and President Trump. Their letter was submitted as an official comment on the rulemaking proposed by IRS and the Treasury Department for the federal register.

The Members inquired about how the provision would apply “when a government official has previously received cash payments in anticipation of future favors (e.g., government contracts).” They wrote:

“This letter seeks clarification regarding the application of selected proposed rules that would define qualified tips…

“There is an open question regarding the application of the tips deduction when a government official has previously received cash payments in anticipation of future favors (e.g., government contracts). The first question is whether such payments are customarily tips.


“Consider these factors in the case of a man who is broadly expected to become a high-ranking political official. This man is given a bag full of cash by a businessman who hopes to win future government contracts… The proposed regulations would exclude from qualified tips, ‘[a]ny amount received for a service the performance of which is a felony or -misdemeanor under applicable law is not a qualified tip.’ The statute makes no mention of distinguishing legal from illegal activity, and the final regulations should explain the authority for this distinction. Congress made no indication that payments for illegal activities should be excluded from the tips rule.

“This comment requests an example as follows: A political operative is a clear front runner for a high-level political job within the next six months. He is given $50,000 in cash in a bag in a parking lot, after a lunch discussing hopes that the payor will receive government contracts if the operative is put in a place of power. There is no guarantee of any service or result. Under these circumstances, the payment [is/is not] illegal and [is/is not] a qualified tip. [Describe treatment under OBBBA tips provision.]

“In crafting this example, and in the interest of additional clarity, the final regulations should further explain whether and when a payment like this is illegal.”

A signed copy of the letter is available here, and full text follows below.

***

The Honorable Kenneth J. Kies
Assistant Secretary of the Treasury, Tax Policy
Department of the Treasury
1500 Pennsylvania Avenue Washington, DC 20220

Re: Comment on Proposed Regulations Identifying Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips (RIN 1545-BR63)

This letter seeks clarification regarding the application of selected proposed rules that would define qualified tips, as published in the Federal Register on September 22, 2025. Clarifying the application of the final regulations would be in the interest of ensuring clarity to taxpayers and ensuring that the law is implemented as written by Congress.

Background

On July 4, 2025, President Trump signed Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA). Section 70201 of OBBBA is titled “No Tax on Tips” and would add a new section 224 to the Internal Revenue Code. The provision does not actually exclude tips from being taxed. Instead, the general structure of the provision is a deduction against income taxes for tips received “by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024.” The provision is limited by adjusted gross income, with phaseouts above the limit. The deduction cannot exceed $25,000. Under this structure, all tips will remain taxable under payroll tax rules. For purposes of this comment, the most important statutory provision is the definition of “Qualified Tips” provided in new Code section 224(d):

(d) Qualified tips.–For purposes of this section–

(1) In general.–The term “qualified tips” means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary.

(2) Exclusions.–Such term shall not include any amount received by an individual unless–

(A) such amount is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor,

(B) the trade or business in the course of which the individual receives such amount is not a specified service trade or business (as defined in section 199A(d)(2)), and

(C) such other requirements as may be established by the Secretary in regulations or other guidance are satisfied.

For purposes of subparagraph (B), in the case of an individual receiving tips in the trade or business of performing services as an employee, such individual shall be treated as receiving tips in the course of a trade or business which is a specified service trade or business if the trade or business of the employer is a specified service trade or business.

(3) Cash tips.–For purposes of paragraph (1), the term “cash tips” includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement.

Fact Pattern – Bags of Cash for in Anticipation of Government Contracts

There is an open question regarding the application of the tips deduction when a government official has previously received cash payments in anticipation of future favors (e.g., government contracts). The first question is whether such payments are customarily tips. The proposed regulations adopts definitions that “are consistent with IRS guidance defining tips for FICA and income tax withholding purposes in . . . Rev. Rul. 2012-18.” Rev. Rul, 2012-18  lays out factors to distinguish wages from tips. The following factors lean in favor of categorization as tips:

(1) The payment must be made free from compulsion;

(2) The customer must have the unrestricted right to determine the amount;

(3) The payment should not be the subject of negotiation or dictated by employer policy; and,

(4) Generally, the customer has the right to determine who receives the payment

Consider these factors in the case of a man who is broadly expected to become a high-ranking political official. This man is given a bag full of cash by a businessman who hopes to win future government contracts. In this case, each of the factors laid out in Rev. Rul. 2012-18 is present. But the inquiry does not stop there. The proposed regulations would exclude from qualified tips, “[a]ny amount received for a service the performance of which is a felony or -misdemeanor under applicable law is not a qualified tip.” The statute makes no mention of distinguishing legal from illegal activity, and the final regulations should explain the authority for this distinction. Congress made no indication that payments for illegal activities should be excluded from the tips rule.

This comment requests an example as follows:

A political operative is a clear front runner for a high-level political job within the next six months. He is given $50,000 in cash in a bag in a parking lot, after a lunch discussing hopes that the payor will receive government contracts if the operative is put in a place of power. There is no guarantee of any service or result. Under these circumstances, the payment [is/is not] illegal and [is/is not] a qualified tip. [Describe treatment under OBBBA tips provision.]

In crafting this example, and in the interest of additional clarity, the final regulations should further explain whether and when a payment like this is illegal.

We hope this comment is helpful, and we look forward to studying the final rules.