The IRS wants prison and jail inmates to return their coronavirus stimulus checks

Kelly McLaughlin

Economic stimulus checks are prepared for printing at the Philadelphia Financial Center May 8, 2008 in Philadelphia, Pennsylvania. Jeff Fusco/Stringer

The IRS is asking state officials to help get stimulus payments back from people who are incarcerated.

According to the Associated Press, states have returned hundreds of thousands of dollars to the IRS that had originally been issued to people who are incarcerated. 

When the stimulus package was first announced, there was no language specifically banning inmates from receiving funds, but the IRS added a line to its website about banning inmates on May 6, according to the Prison Policy Initiative — a think tank focused on criminal justice reform.

The IRS hasn't explained the legality behind the decision.

The IRS wants prison and jail inmates to return any stimulus money they received from coronavirus relief payments, saying the funds were sent by mistake.

According to the Associated Press, the IRS is asking state officials to help get money back, and they've already received hundreds of thousands of dollars.

The IRS did not explain to the Associated Press the legal justification for taking the money back. The agency has not responded to a request for comment from Insider.
The Prison Policy Initiative, a think tank focused on criminal justice reform, said in May that the IRS's website didn't initially have language banning incarcerated people from receiving coronavirus relief funds. On May 6, the IRS added a line to it's frequently asked questions page, which said people in jail or prison cannot qualify for stimulus money.

"I can't give you the legal basis. All I can tell you is this is the language the Treasury and ourselves have been using," IRS spokesman Eric Smith told the Associated Press. "It's just the same list as in the Social Security Act."

The Social Security Act bans people who are incarcerated from receiving some insurance benefit payments, including old-age and survivor benefits.

It's not yet known how many prisoners have received stimulus funds, but officials in Utah, California, Vermont Mississippi, Pennsylvania, Arizona, Kansas, Idaho, Montana, and California have all intercepted checks.

Tax attorney Kelly Erb told the Associated Press that there's no hard rule that the money needs to be taken, and it remains unclear what would happen if an inmate kept his or her money.


"I think it's really disingenuous of the IRS," Erb said Tuesday. "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."

"It appears that the IRS is just making this up," Wanda Bertram, a spokeswoman for the Prison Policy Initiative, told the Associated Press.

In a blog post about incarceration and stimulus money, the Prison Policy Initiative's Stephen Raher said the funds could be lifesaving for people behind bars.

He said that many prisons and jails now charge inmates for toiletries and communication with loved ones, and that many inmates rely on money transfers from relatives and friends.

"Providing stimulus funds to incarcerated people helps protect the health and well-being of those behind bars and provides relief to their loved ones at home," he wrote.