(FamilyRetirementClub.com)- When Congressional Democrats finally, eventually decided to work with President Donald Trump in helping American workers through the coronavirus lockdown, it resulted in people all over the country receiving stimulus checks. Because of the urgent nature of the lockdown and the quick rise in unemployment, the measure was rolled out as quickly as possible. That meant everybody received a check…including prisoners.
Now, the Internal Revenue Service is requesting that state officials take back hundreds of millions of dollars of payments that were sent to inmates in error. The federal tax agency admits that the decision to sent checks to prisoners was an error, but it’s a bit more complicated than that.
Again, because of the rushed nature of the response, the legislation that authorized the government to send checks during the initial outbreak didn’t specifically exclude people in jail or in prison. The IRS has not specified on what legal basis they are trying to reclaim the money, however. It is a complex issue that may well not go as simply as they had hoped.
The IRS points to the Social Security Act on its official website, which specifically stops inmates from receiving certain kinds of pension benefit payments while they are imprisoned.
Eric Smith, a spokesman for the IRS, told the media that he can’t explain the legal basis.
“All I can tell you is this is the language t he Treasury and ourselves has been using,” he said. “It’s just the same list as in the Social Security Act.”
Kelly Erb, a tax attorney, told the press that there is no legal right for the IRS to ask for the checks back, even if some people think it’s the right thing to do.
“I think it’s really disingenuous of the IRS,” she said. “It’s not a rule just because the IRS puts it on the website. In fact, the IRS actually says that stuff on its website isn’t legal authority. So there’s no actual rule – it’s just guidance – and that guidance can change at any time.”
The IRS doesn’t know exactly how much money was given to prisoners, but data suggests…it’s a lot.
While it’s uncertain whether the money can be recovered, some activists claim the prisoners should be allowed to keep the money as it will help them if they have been recently released.