Over $100 million in stimulus checks to go to inmates amid controversy

US District Court Judge Phyllis Hamilton has granted a preliminary injunction that is going to require the IRS and Treasury Department to stop withholding stimulus checks to incarcerated people.

Judge Hamilton also required the government to reconsider the denial of prior stimulus check applications that were based on the incarceration status of an individual.

It’s estimated that at least 80,000 incarcerated individuals were eligible for economic payments as of May 2020.

These payments likely will total over $100 million according to the Treasury Department’s Inspector General. 

This is proving to be a pretty controversial issue.

On the one hand, many feel like those who have been incarcerated have forfeited certain rights and privileges which would include receiving stimulus checks.

They question how necessary stimulus checks or two individuals living in a prison system where virtually all necessities are provided by the state.

Others argue that inmates are in need of financial aid as much as other people and that they have ways of injecting money into the economy by making small purchases.

“The country is suffering during this pandemic and economic crisis, and incarcerated people and the families they rely on for support are no exception,” said Yaman Salahi, a Partner at Lieff, Cabraser, Heimann & Bernstein, and counsel for the Plaintiffs and Class. 

“Judge Hamilton’s order ensures that incarcerated people will receive the sorely needed economic assistance that Congress allocated.”

The Cares Act was apparently silent on whether or not incarcerated individuals should receive direct payments.

The IRS did update the frequently asked questions at one point in the month of May and stated that incarcerated individuals do not qualify for stimulus checks.

The IRS refused to issue payments to incarcerated individuals and worked with the prison systems to intercept payments that were going to prisoners in states like Arizona, California, Mississippi, and others.

Several legal experts questioned the legality of barring incarcerated people from receiving funds.

“It appears that IRS made up this ‘rule’ out of whole cloth and announced it by posting it on a webpage,” wrote Stephen Raher of the Prison Policy Initiative.

Interestingly, when stimulus checks went out in 2009 incarcerated individuals were explicitly ruled ineligible based on language in the bill.

That language was not found in the Cares act, however.

“There is nothing in the CARES Act that gives the IRS authority to decide that incarcerated people are ineligible to receive stimulus checks,” stated Senator Sherrod Brown (D-Ohio).

“Inmates—who are disproportionately people of color and from low income communities—already suffer from a lack of resources and heightened exposure to COVID-19 due to the failed response to the virus by the prison system. Incarcerated people and their families need more help during this pandemic, not more undue punishment.”

When ruling in favor of the inmates, the judge noted, “incarcerated persons who otherwise qualify for an advance refund are not excluded as an ‘eligible individual’ and that “the IRS’s decision to exclude incarcerated persons from advance refund payments is likely contrary to law.”

It’s possible that over 1 million individuals were affected by this rule denying stimulus checks to inmates.

So we might see the total amount going to inmates balloon much higher than $100 million.

Do you agree that inmates should receive stimulus checks?



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