A federal judge has ruled that denying stimulus checks to incarcerated individuals is unconstitutional. Quick. Call my stockbroker. I want to buy stock in companies that make slim jims, crowbars, lock picks, and screwdrivers. The government immediately filed an appeal. They have asked for an injunction to put off payments while their appeal is ruled on.
If the appeal loses, the IRS will have to issue checks for $1,200 to every inmate in the country. They had paid out about one million in stimulus checks to inmates before they decided they were not eligible. They required the inmates to return the money. The inmates initiated a class action suit which led to the decision but could be on shaky legal grounds.
Many of these prisoners may not have filed income taxes in years. The stimulus was to help out working families. People who through no fault of their own were not working and others affected by the shutdowns. I don’t believe they were thinking about criminals who are locked up when the bill was drafted.
Yaman Salahi, partner at the law firm Lieff, Cabraser, Heimann & Bernstein was the law firm who won the suit.
“[Incarcerated people] rely heavily on their loved ones on the outside for support, and those are the same people who are less and less able to provide that support during the pandemic.”
New York Post reported:
“Hamilton set an Oct. 24 deadline for the IRS to reconsider sending the payments to locked-up individuals whose checks have been withheld, intercepted, or returned. Incarcerated people who didn’t file a 2018 or 2019 income tax return — which would allow the IRS to automatically distribute their checks — have until Oct. 30 to submit paperwork to claim the money.”
Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California said that the decision by the administration not to issue checks to inmates was capricious and arbitrary. She then ordered the IRS to issue the checks.
The federal government in response filed an appeal of the judge’s rulings.
According to CNBC, the IRS stated, “The government has filed an appeal and request to stay the preliminary injunction. Any updates regarding the appeal will be posted on this webpage.”
The outlet reported that those prisoners who are eligible and do not receive their stimulus payments this year will be able to receive a credit for those funds when filing their 2020 tax returns.