Checks sent to state prisons were returned to the IRS, but Prison Policy Institute says incarcerated individuals need money at this time as well
Prisoners in Oregon who received stimulus checks as a result of the CARES Act will never see their payments, according to the Oregon Department of Corrections.
On May 6, the Internal Revenue Services updated its Economic Impact Payment webpage to indicate that incarcerated individuals as defined by the Social Security Act are not eligible to receive the $1,200 stimulus checks, which are considered a refundable tax credit.
“The (Oregon DOC) received confirmation from both the Internal Revenue Services and the Oregon Department of Justice that federal stimulus funds received on behalf of an adult in custody should be returned to the U.S. Treasury,” Corrections Department communications manager Jennifer Black said in an email to Street Roots.
The Corrections Department’s central trust received 25 stimulus checks for prisoners as of late May, Black said. Twenty-one of those checks have been sent back to the IRS.
“Please be aware that when the Department of Corrections receives any (economic impact payment) directly from the United States Internal Revenue Service, the (DOC) will return the EIP to the United States Internal Revenue Service,” said a letter issued by the department to those who may have received a stimulus check in their name.
The remaining four checks were sent to people in prison from family members who may have received the checks at a home address or possibly spouses who jointly filed with an incarcerated person. Those checks are being returned to those families with a letter that cites the IRS guidance, Black said.
The Economic Impact Payment webpage states, “For a Payment made with respect to a joint return where only one spouse is incarcerated, you only need to return the portion of the Payment made on account of the incarcerated spouse.”
In Multnomah County, only one person in jail received a stimulus check by late May, Sheriff’s Office spokesperson Chris Liedle said. He said the Sheriff’s Office did not receive direct communications from the IRS.
Liedle was not able to confirm which of the county’s two jails received the check.
“The stimulus check we received was marked for the individual, but under the CARES Act, incarcerated individuals do not qualify, so the check was actually returned to the IRS,” Liedle said in an email.
But section 2201 of the CARES Act, which allows for the distribution of the refundable tax credits, does not appear to explicitly exclude incarcerated people from receiving payments. Instead, it states that an eligible individual is anyone other than a non-resident immigrant, an estate or trust, or a person who is claimed as a dependent on someone else’s taxes.
In a report issued this month, a lawyer at the Prison Policy Initiative illuminated this discrepancy between the IRS and the congressional act after receiving reports of corrections departments intercepting stimulus checks for prisoners in two other states.
“There is a well-defined process for the IRS to issue rules and regulations that supplement tax laws passed by Congress. The purported ban on stimulus payments to incarcerated people was not a result of this rulemaking process,” lawyer Stephen Raher said.
Wanda Bertram, communications strategist for the Prison Policy Initiative, couldn’t say for sure whether the actions of corrections departments like Oregon’s were technically legal.
“It is following guidance to the IRS that is contrary to the law,” she said. “Although the IRS is issuing guidance that stimulus checks for incarcerated people should be returned, that’s wrong.”
Bertram said people might not see why someone in prison would need the $1,200 financial boost.
“But if you think about the fact that people in prison have loved ones that are paying to care for them, (those) people are under severe financial stress right now,” she said. “And most of them come from impoverished backgrounds.”
EXPLOITATION OR OPPORTUNITY? Inside Oregon’s prison workforce
As prisons across the U.S. remain under lockdown with no visitations, she said, prisoners are spending more money on phone calls to keep in touch with people back home, and on commissary food to make up for a reported decline in the quality and quantity of meals since the pandemic.
“What this is a reminder of is that what goes on in prisons is so hidden from the public,” Bertram added.
An added layer, she said, is that prisoners being released into an economically shutdown outside world in order to thin out populations in facilities and reduce the spread of the novel coronavirus.
The Los Angeles Times reported in May that in California, 3,500 prisoners were released from state prisons amidst the global pandemic. That same month, The Connecticut Mirror reported Connecticut’s prison population is the lowest it had been in 27 years. In April, daily population averages at county jails in Oregon had reduced by nearly 45%, according to Oregon Public Broadcasting, in part due to the early release of some vulnerable populations.
In Oregon, however, Gov. Kate Brown declined to release state prisoners to allow for social distancing.
INCARCERATION: Does coronavirus make the case for jail reform?
Over 2 million Oregonians have received stimulus checks as of mid-May, according to data released by the IRS and U.S. Department of Treasury. IRS media representative David Tucker said there is no further data regarding where checks are being sent, to correctional facilities or otherwise.
“Those stats aren’t available right now. As you can imagine, we’re still in the process of delivering economic impact statements,” he said.
Tucker said no further information regarding prisoner eligibility for stimulus checks was available beyond what was listed on the agency's FAQ website.
The Taxpayer Advocate Service, an independent organization within the IRS, was unable to provide information about the IRS’ recent take on prisoners’ economic impact payment eligibility. According to its website, the Taxpayer Advocate Service assists individuals and businesses with tax issues that cause financial difficulty and also “handles large-scale or systemic problems that affect many taxpayers.”
Taxpayer Advocate Service spokesperson Howvard Brooks did not have an answer as to what will happen to prisoners and their families or other ineligible individuals who receive a stimulus check and don’t send it back.
“There will be responses to those questions. When they will appear I don’t know,” Brooks said.
The Department of Treasury did not respond to a request for comment.
CORRECTION: An earlier version of this story inaccurately referred to Public Affairs Specialist Howvard Brooks as the Communications director at the Taxpayer Advocate Service. We regret the error.
Email Street Roots Staff Reporter Jessica Pollard at jessica@streetroots.org.
Street Roots is an award-winning, nonprofit, weekly newspaper focusing on economic, environmental and social justice issues. Our newspaper is sold in Portland, Oregon, by people experiencing homelessness and/or extreme poverty as means of earning an income with dignity. Learn more about Street Roots. Support your community newspaper by making a one-time or recurring gift today.
© 2020 Street Roots. All rights reserved. | To request permission to reuse content, email editor@streetroots.org or call 503-228-5657, ext. 404.
