I
110th CONGRESS
2d Session
H. R. 7021
IN THE HOUSE OF REPRESENTATIVES
September 23, 2008
Mr. Larson of Connecticut (for himself, Mr. Sam Johnson of Texas, and Mr. Bishop of Georgia) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide tax benefits to individuals who have been wrongfully incarcerated.
Short title
This Act may be cited as the
Wrongful Convictions Tax Relief Act of
2008
.
Exclusion for wrongfully incarcerated individuals
In general
Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139B the following new section:
Certain amounts received by wrongfully incarcerated individuals
Exclusion from gross income
Gross income shall not include—
in the case of any wrongfully incarcerated individual, any civil damages, restitution, or other monetary award (including compensatory or statutory damages and restitution imposed in a criminal matter) relating to the incarceration of such individual for the covered offense for which such individual was convicted, and
in the case of a qualified wrongfully incarcerated individual, the first $50,000 of income received by such individual in any taxable year beginning after December 31, 2007.
Limitation relating to income exclusion
In general
The exclusion under subsection (a)(2) shall not apply to any qualified wrongfully incarcerated individual for any taxable year other than a taxable year in the qualified benefit period with respect to such individual.
Qualified benefit period
For purposes of paragraph (1), the term
qualified benefit period
means, with respect to any qualified
wrongfully incarcerated individual, the first 15 taxable years ending after the
first date on which such individual is a wrongfully incarcerated
individual.
Limitation based on years of incarceration
In the case of a qualified wrongfully
incarcerated individual who served a sentence of imprisonment of less than 15
years for the covered offense with respect to which such individual is a
qualified wrongfully incarcerated individual, the number of full years that
such individual was so imprisoned shall be substituted for 15
in
paragraph (2).
Termination of exclusion upon conviction of subsequent offense
If a qualified wrongfully incarcerated individual is convicted of a criminal offense under Federal or State law that is punishable by more than 1 year imprisonment at any time during the qualified benefit period, subsection (a)(2) shall not apply to the taxable year which includes the date of such conviction and all subsequent taxable years.
Wrongfully incarcerated individual
For purposes of this section—
In general
The term wrongfully incarcerated individual means an individual—
who was convicted of a covered offense,
who served all or part of a sentence of imprisonment relating to that covered offense, and
who was pardoned, granted clemency, or granted amnesty for that covered offense because that individual was innocent of that covered offense, or
for whom the judgment of conviction for that covered offense was reversed or vacated, and
for whom the indictment, information, or other accusatory instrument for that covered offense was dismissed or who was found not guilty at a new trial after the judgment of conviction for that covered offense was reversed or vacated.
Covered offense
The term covered offense means any criminal offense under Federal or State law, and includes any criminal offense arising from the same course of conduct as that criminal offense.
Qualified wrongfully incarcerated individual
For purposes of this section, the term qualified wrongfully incarcerated individual means a wrongfully incarcerated individual who, except for the covered offense described in subsection (c)(1)(A), has never been convicted of a criminal offense (other than a juvenile offense) under Federal or State law that is punishable by more than 1 year imprisonment.
Reporting requirements
For purposes of this section and section 36, the Secretary to impose such reporting requirements as the Secretary determines necessary or appropriate to carry out this section, including a requirement that the individual include with the return of tax for the taxable year a statement or attestation that the individual has not been subsequently convicted of a crime within the meaning of subsection (b)(4).
.
Conforming amendment
The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139B the following new item:
.
Effective date
The amendments made by this section shall apply to taxable years beginning before, on, or after the date of the enactment of this Act.
Refundable credit for employment taxes paid by wrongfully incarcerated individuals
Allowance of refundable credit
Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section:
Employment taxes of wrongfully incarcerated individuals
In general
In the case of a qualified wrongfully incarcerated individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of—
50 percent of the taxes imposed on the self-employment income of such individual under subsections (a) and (b) of section 1401 during the taxable year, plus
the taxes imposed on the wages received by such individual with respect to employment under subsections (a) and (b) of section 3101 during the taxable year.
Limitations
Dollar limitation
The total amount of wages and self-employment income taken into account under subsection (a) with respect to any individual for any taxable year shall not exceed $50,000.
Taxable year limitation
The credit under subsection (a) shall not be allowed to any qualified wrongfully incarcerated individual for any taxable year other than a taxable year in the qualified benefit period determined with respect to such individual under paragraphs (2) and (3) of section 139C(b).
Termination of credit upon conviction of subsequent offense
If a qualified wrongfully incarcerated individual is convicted of a criminal offense under Federal or State law that is punishable by more than 1 year imprisonment at any time during the qualified benefit period (as so determined), subsection (a) shall not apply to the taxable year which includes the date of such conviction and all subsequent taxable years.
Qualified wrongfully incarcerated individual
For purposes of this section, the term qualified wrongfully incarcerated individual has the meaning given to such term under section 139C(d).
Reference
For reporting requirement, see section 139C(e).
.
Conforming amendments
Section 1324(b)(2)
of title 31, United States Code, is amended by inserting , 36,
after 35,
.
The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 36 and inserting the following:
Sec. 36. Employment taxes of wrongfully incarcerated individuals.
Sec. 37. Overpayments of tax.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2007.