All the same, it is heart hearted that lawmakers took the time to make clear that that rewards come without strings attached.
The partly legislation and taking up is less than a full page. But the language makes clear that all wrongly incarcerated individuals, as defined by the law, can exclude civil damages or monetary rewards from their gross income, whether they were convicted at the federal or state level.
To a layperson, it may seem odd that this scenario was even in question. It all seems odd that that scientific convicts you of a crime, and recognizes that that has done enough harm to merit making some sort of compensation for the suffering you endured , it seems counterintuitive that another branch of the government would not turn around and demand part of that restitution back in the form of income tax.
Yet prior to this tax code treatment, such awards are treatment of the awards.
This is not exactly what the wrongful convictions is small. I am an opinion column for the Washington Post last summer, Samuel R. Gross cited a study he co-authored present that death penalty in the US are later found to be innocent. Gross, a law professor at the University of Michigan and the editor of the National Registry of Exonerations, also pointed out that those who are exonerated at all are reliably lucky, given the limited resources of innocence projects and other organizations concerned with such cases. (1)
This situation is exacerbated by a justice system where most defenders are encouraged to plead guilty in order to take to take According to the Innocence Project, in cases where DNA evidence has conclusively proved an individual to be innocent of the crime for which he or she was convicted, 27 percent were wholly or completely due to false admissions of guilt. (The leading cause of wrongful conviction was eyewitness misidentification.) (2)
And the government ___ ___ ___ 0 ___ ___ 0 ___ ___ ___ 0 exempt such payments from gross income for federal tax purposes is absolutely a matter of common sense.
The bipartisan legislation was repeatedly proposed by Sam Johnson, R - Texas, and John Larson, D-Connecticut, as recently as 2015.
The tax code has long exempt awards for personal physical injuries of all types, including car wrecks or sports accidents, from gross income; restitution payments fell under the same umbrella if they are tax exempt at all.
In 2008, the Tax Court considered the case of a petitioner who received a settlement of $ 49,000 after being mistakenly arrested and jailed for eight hours. That case set groundwork for the tax treatment of damages paid for short-term incarceration. The court rule in favor of the Internal Revenue Service, concluding that physical detention for a short amount of time was not inherently a "physical injury" under the relevant section of the law.
It's obvious that being mistakenly jailed for 8 hours in fundamentally different from spending 15 or 20 years in prison for a crime one did not commit. A 2010 memorandum, released by the service, attempted to clarify the situation, but extremely left the matter resting on the foundation of personal physical injury.
The new legislation relieves the victims of injustice from having to prove the physical dimension of their suffering. Impulsoned do suffer physically as a result of their ordeals, the IRS will no longer ask them to quantify how much their awarded damages relating to such injuries, as opposed to the loss of liberty, income and opportunity caused by their convictions.
Congress did good work in making this principle. Wrongful conviction is always harmful, whether or not that harm includes a physical dimension. Congress did good work in making this principle plain.
Sources:
1) The Washington Post, "The staggering number of wrongful convictions in America"
2) Innocence Project, "The Causes of Wrongful Conviction"
