Allows exonerees additional time to apply for retroactive tax relief
May 22 2017
WASHINGTON – U.S. Sens. Mark R. Warner (D-VA) and John Cornyn (R-TX) today introduced the Wrongful Convictions Tax Relief Act, bipartisan legislation to temporarily extend the deadline for wrongfully convicted individuals to apply for tax relief on their compensation.
“Making sure exonerees can actually access this tax relief provision is the right thing to do,” Sen. Warner said. “Breaking down financial barriers for the wrongfully convicted is an important part of our responsibility to help put these innocent men and women in a position to ensure successful reentry into their communities.”
“Individuals who have been failed by our justice system often face insurmountable hurdles when moving forward with their lives after being exonerated,” Sen. Cornyn said. “This is an important step towards helping those who have been wrongfully convicted rebuild their lives.”
“Wrongfully convicted people face profound barriers to reentry while grappling with the lasting physical, emotional and psychological impacts of incarceration,” said Rebecca Brown, Policy Director for the Innocence Project, which is affiliated with Cardozo School of Law. “These are people who, through no fault of their own, were wrongfully convicted by the government. Taxing the compensation provided to these innocent men and women was a wrong corrected by the Tax Relief Act of 2015. We greatly appreciate the proposal to extend the deadline so that further outreach can assure that everyone who can benefit from a tax refund can be located. We must do more to address the reentry needs of the wrongfully convicted and ensuring that exonerees who receive compensation are not taxed is a critical first step to improving reentry support."
The Wrongful Convictions Tax Relief Act builds upon legislation that became law as a part of the PATH Act in December 2015 allowing wrongfully incarcerated individuals to exclude from their income for federal tax purposes the civil damages, restitution, or other monetary awards they received as compensation for the wrongful conviction. The PATH Act originally provided a one-year deadline for exonerees to apply to keep their compensation tax free, but was effectively cut short due to the Internal Revenue Service’s slow implementation of the necessary guidance. Senator Cornyn and Senator Warner’s legislation temporarily extends the deadline for those wrongfully convicted to amend their tax returns and apply for a refund on the taxes they previously paid on their compensation.