Stimulus checks totaling almost $800 million went to incarcerated people, IRS records show

·2 min read
IRS
IRS documents were obtained by American Crossroads. Andrew Harnik/AP Photo
  • About 560,000 incarcerated people received $783.5 million in stimulus payments, Fox News reported.

  • The payments followed debates in congress and courtrooms over payments to incarcerated people.

  • In October, a federal judge ruled that excluding such individuals was "arbitrary and capricious."

  • See more stories on Insider's business page.

People incarcerated in US prisons received $783.5 million in stimulus payments, Fox News reported.

About 560,000 people imprisoned for the entire 2020 tax year received payments under the American Rescue Plan, according to IRS documents obtained by conservative group American Crossroads, Fox reported.

The data release followed a series of debates in congress and courtrooms over whether incarcerated people should qualify for payments.

In a June 2020 report, the Treasury Inspector General for Tax Administration said economic-impact payments had been sent to dead people and people in prisons.

By May 2020, incarcerated people had received 84,861 payments totalling $100 million, the IG report said. Dead people received 1.2 million payments totalling $1.6 billion. The IG report said it notified the IRS at the time.

"In response, IRS management noted that payments to these populations of individuals were allowed because the CARES Act does not prohibit them from receiving a payment," the IG said in its report.

The IRS later clarified that dead people and those in prison should not have been included in economic-impact payments, the IG said.

In August 2020, two people incarcerated in California prisons filed a federal class-action lawsuit against then-Treasury secretary Steven Mnuchin over the ban on payments.

Colin Scholl and Lisa Strawn, who were both incarcerated, argued in their complaint that the "IRS has no legal basis for withholding, retracting, or asking others to intercept stimulus payments to incarcerated persons."

US District Court judge Phyllis J. Hamilton in October ruled incarcerated people could receive payments. She wrote that excluding anyone from stimulus payments solely based on whether they were incarcerated was "arbitrary and capricious."

In March, the court said in a filing that it continued to receive "a large volume" of filings from people in prison seeking to join the closed lawsuit.

The American Rescue Plan was passed in March. Sen. Tom Cotton said "every single Democrat" voted for payments to "violent criminals," in a statement to Fox News published on Friday

He added: "Sending cash to murderers and rapists in prison has nothing to do with solving the pandemic or improving the economy. Now, the same people who sent hundreds of millions of dollars as gifts to these inmates want to spend trillions more in an even bigger and more partisan bill."

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