News 05.22.17

Senators Cornyn and Warner Introduce Bill to Extend the Time Period to Apply for Federal Tax Refund on Wrongful Conviction Compensation

By Innocence Staff

Today, Senators John Cornyn (R-TX) and Mark Warner (D-VA) introduced a bill to extend the ability of exonerees to apply for a refund of federal taxes paid previously on compensation for wrongful conviction. This bipartisan legislation is a companion to the House bill, H.R. 885, introduced in February by Representatives Sam Johnson (R-TX) and John Larson (D-CT).

In December 2015, upon passage of the Wrongful Convictions Tax Relief Act (as a part of the larger Protecting Americans from Tax Hikes Act), Congress ended the federal government’s taxation of compensation received for wrongful conviction.  This new law amended the Internal Revenue Code to allow people who were previously wrongfully incarcerated exclusion from federal taxation on civil damages, restitution or other monetary awards received as compensation for wrongful conviction. Thirty states, the District of Columbia and the federal government provide some form of statutory compensation for wrongful conviction and incarceration. Additionally, some individuals fight either through their courts or state legislatures to secure compensation for their wrongful convictions.

As a part of the Wrongful Convictions Tax Relief Act, individuals who paid federal tax on wrongful conviction compensation were eligible to apply for a refund of that tax during a one-year time period dating from the law’s enactment. However, given that the Internal Revenue Service’s implementation of the law took several months and rigorous outreach to exonerees, and preparation of individual tax refund filings took more time and resources than was anticipated, Senators Cornyn and Warner and Representatives Johnson and Larson agreed to fight for more time for exonerees to apply for this important tax refund.

At this time, it is unclear exactly when the House and Senate will consider and pass the bill; however, advocates are pushing for bill passage to occur as soon as possible.

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  1. A great informative post you shared on this page about calculating the tax returns of a successful business easily by using online system softwares , I read this post and remember the best points especially ” customer service management ” mentioned in this article which help me for running a business successfully with the help of professional accounting .If you want to start a business successfully then you must read this article carefully and keep it in your mind all the best points of a great article which help you to running a business successfully with the professional accountant .
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  2. LINDA BABINEAUX says:

    How wrong to charge tax on a “Wrongful Conviction “? When will we get smart leaders.

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