Wrongful Conviction Compensation Now Tax-Free
The extent in which technology has advanced over the last two decades has led to a significant increase in wrongful convictions exonerating the criminal defendant. Many states have been reassessing their current wrongful conviction compensation plans that provide restitution to criminal defendant for years served as a result of the conviction. Unfortunately for many, the wrongful conviction compensation packages vary widely state-to-state and many states provide little to no compensation to the wrongfully convicted or cap their ability to be compensated at an extremely low rate.
Wrongful Conviction Compensation Packages in Florida and Nationwide
Florida has one of the strongest wrongful conviction compensation packages; it provides $50,000 annually to the wrongfully convicted with a compensation cap of $2 million. As an additional perk, he or she also is able to receive up to 120 hours of tuition at a state educational institution, such as a state college or university or vocational program. Other states, however, like Arizona, Georgia, Idaho, Kentucky, Michigan, and several others, have no compensation law on record, providing even less than what those who have been correctly convicted and paroled receive on their release date.
The Wrongful Convictions Tax Relief Act
A recently passed law, known as the Wrongful Convictions Tax Relief Act, has extended an additional benefit to those wrongfully convicted who are compensated: tax-free money. Previously the compensation was only tax-free where the wrongfully-convicted proved that he or she was physically injured while in prison, or while in the custody of the prison outside the prison-walls, such as injury due to a car crash or a slip and fall event.
Reasoning Behind the Update of the Act
The major push behind this legislative change was due in large part to help right a wrong. It is hard enough for a person to overcome what has happened to him or her and the worry about re-entry into society and the years lost; and then to worry about the Internal Revenue Service coming to collect. The drafters of this act also felt it was counterintuitive to compensate individuals for what the government has done to them, but then to require them to pay back to the IRS a share of their compensation award. It made little to no sense that the IRS should financially benefit from the person’s loss of liberty.
Inconsistencies in the IRS Tax Code as a Result
The law, however, does create some inconsistencies. According to past practice in the 1950s and 1960s, prisoners of war, holocaust survivors and civilian internees were able to receive tax-free compensation for their loss of liberty as ruled by the IRS. The practice, in 2007, however, was found to outmoded and this benefit was stricken from the IRS tax code. The IRS determined that the only time that a person who had lost their liberty could receive tax-free compensation was in the event where a person was not only wrongfully convicted, but also had been physically injured or sick while in the custody of the prison. The new law, however, widens the benefits to the wrongfully convicted in an attempt to truly compensate them for the missteps that led to the miscarriage of justice.
Experienced Criminal Defense Attorney in Fort Lauderdale
Overturning a wrongful conviction is difficult and even the most innocent may not see this type of vindication and exculpation. To avoid such a long and terrible road toward redemption, it is crucial that an innocent person is not convicted in the first place. This puts a significant emphasis on the role that a defense attorney takes on. It is important speak with an experienced defense attorney like Kevin J. Kulik who can help to advocate on your behalf and prove your innocence. Contact Kevin J. Kulik today for a free and confidential consultation in the Fort Lauderdale area.