IRS must pay $100 million worth of $1,200 stimulus checks, judge orders in prisoners’ lawsuit

On September 24, 2020 U.S. District Court Judge Phyllis Hamilton issued an order certifying a nationwide class of incarcerated individuals as well as granting a preliminary injunction requiring the IRS and Treasury Department to stop withholding stimulus checks solely on the basis of their incarceration status.

Judge Hamilton also required the government to reconsider prior denials of stimulus check applications that were due to the incarceration status of a person within 30 days. To ensure accountability, Hamilton ordered that “within 45 days, defendants [IRS and Treasury] shall file a declaration confirming these steps have been implemented, including data regarding the number and amount of benefits that have been disbursed.”

As of May, 2020, at least 80,000 incarcerated individuals were eligible for economic impact payments of over $100 million, according to a report by the Treasury Department’s Inspector General. These individuals should, therefore, receive a much needed financial infusion in the coming months. Other incarcerated individuals who may not have filed a claim are also eligible now. “The country is suffering during this pandemic and economic crisis, and incarcerated people and the families they rely on for support are no exception,” said Yaman Salahi, a Partner at Lieff, Cabraser, Heimann & Bernstein, who is representing the Plaintiffs and Class. “Judge Hamilton’s order ensures that incarcerated people will receive the sorely needed economic assistance that Congress allocated.”


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