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Judge Orders IRS To Dole Out $100 Million In Stimulus Funds To Prison Inmates

Sacramento, CA – A federal judge has ruled that the U.S. government has no right to withhold COVID-19 stimulus money from prison inmates.

U.S. District Court for the Northern District of California Judge Phyllis Hamilton determined that nothing in the Coronavirus Aid, Relief, and Economic Security (CARES) Act formally excludes inmates from receiving the $1,200 stimulus funds, the Los Angeles Times reported.

Hamilton ruled that withholding payments from the those who are incarcerated is both capricious and arbitrary, and she established instructions to ensure that the Internal Revenue Service (IRS) provides inmates with accurate information about the payments she said they are entitled to.

According to a Treasury Inspector General for Tax Administration (TIGTA) report, the IRS had issued $100 million in stimulus money to nearly 85,000 inmates as of June 30, The Washington Post reported.

The report also raised concerns about stimulus checks that had been sent out to people who have died.

The IRS responded by establishing an internal policy that banned payments to inmates, the Los Angeles Times reported.

The agency said that prisoners who had received the $1,200 payments must return them, and warned inmates that trying to obtain stimulus money could result in fraud charges.

Two California prison inmates sued the federal government over the issue in August, claiming that nothing in the CARES Act prohibited them and approximately 1.5 million other U.S. prisoners from collecting the stimulus money, the Los Angeles Times reported.

Hamilton sided with the petitioners and issued a preliminary injunction the following month.

She ordered the IRS to start sending checks to inmates again within 30 days, and told the plaintiffs and the government to come up with a plan to solve the issue, the Los Angeles Times reported.

When those discussions failed, Hamilton stepped in last week and ordered the IRS to update customer service materials and its website by removing warnings that said inmates did not qualify for payments.

She also told the IRS to give prisoners more time to complete the filings required to receive their stimulus funds.

Attorney Yaman Salahi, who helped handle the lawsuit on behalf of the Equal Justice Society, said that his firm has received 2,600 emails and had over 165,000 visits to a website that provides instructions for inmates to file for stimulus checks.

Salahi argued that prisoners “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,” the Los Angeles Times reported.

Colin Scholl, one of the inmates who filed the lawsuit, said that Hamilton’s order shows that prisoners “have value.”

“We have rights, and that itself is a win,” Scholl said. “All of us are hurting during the pandemic, like our friends and family on the outside.”

Lisa Holder, another civil rights attorney working on the case, told the Los Angeles Times that it was “very clear that the IRS is in the wrong.”

“They have to make these payments to incarcerated folks,” Holder declared. “They don’t have any viable legal argument.”

In light of Hamilton’s ruling, the California Department of Corrections and Rehabilitation (CDCR) will resume letting inmates collect checks, and will even help them to complete paperwork so they can send in their requests to receive payment, the Los Angeles Times reported.

“CDCR is in the process of distributing educational information through posters, sample forms, and other communications material for the incarcerated population on how they can submit their paper forms by the deadline,” CDCR spokesperson Dana Simas told the paper.

She said that CDCR had collected 124 checks from inmates earlier this year and returned them to the IRS.

San Francisco attorney Kelly Dermody, a partner with one of the law firms representing the members of the class-action lawsuit, said that the filing “stops executive agencies from improperly rewriting congressional legislation to suit whatever whim they might have,” The Washington Post reported.

“As a human matter, this case addresses the devastating intersection of poverty, mass incarceration and toxic health outcomes, which disproportionately affect Black, Indigenous, Latinx, nonbinary and transgender people,” Dermody said. “Excluding from assistance the people and their families most at economic and health risk from covid-19 is unspeakably cruel, as well as being illegal under the authorizing statute.”

The federal government is appealing the ruling, FOX News reported.

Written by
Holly Matkin

Holly is a former probation and parole officer who is married to a sheriff’s deputy. She is a regular contributor to Signature Montana magazine, and has written feature articles for Distinctly Montana magazine.

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Written by Holly Matkin


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